IMF warns attacks on Saudi Arabia could hurt economies worldwide

Aramco’s headquarters has been hit, flights are suspended and oil prices are rising. The IMF warns that the economic fallout from attacks on Saudi Arabia could be felt worldwide.

The International Monetary Fund warned on Wednesday that attacks on Saudi Arabia could hurt economies worldwide, after a strike damaged oil giant Aramco’s headquarters.

IMF managing director Kristalina Georgieva pointed to Saudi Arabia’s economic importance.

“In that sense, these developments have potentially negative spillovers for everybody, everywhere,” she said at the IMF and World Bank annual meetings in Bangkok.

Saudi Arabia’s energy ministry said an administrative building at Aramco’s headquarters in Dhahran was hit on Tuesday evening, causing a limited fire. It said there were no deaths or injuries.

Yemen’s Iran-aligned Houthis claimed responsibility. The group has also attacked Saudi airports during renewed fighting with a Saudi-led coalition.

The building’s top three floors, including chief executive Amin Nasser’s office, were badly damaged, a person with direct knowledge told Reuters.

Two sources said operations at the complex were continuing as normal, although some employees had been told to work from home. Another said some work had moved to offices abroad.

Aramco oversees its oil rigs, refineries, export terminals and pipelines from a centre at its headquarters. The company had not responded to the news agency’s request for comment.

Oil prices rose on Wednesday, with Brent crude trading above $106 a barrel. Aramco’s shares fell 0.5% in early trading.

Air travel has also been disrupted. Lufthansa has suspended flights to Riyadh up to and including 18 November, according to its latest advisory.

Saudi Arabia plans to let executives join its Future Investment Initiative conference online after attacks on Riyadh airport, Reuters reported, citing two people familiar with the plans. The event is due to take place later this month.

Recovery depends on shipping

Saudi Arabia’s economy was already under pressure from the Iran war and disrupted shipping through the Strait of Hormuz.

The IMF expects it to shrink by 3.3% this year, before growing by 7.9% in 2027.

The fund published those forecasts on Tuesday, but had prepared them before Saturday’s deadly attack on Riyadh airport.

The recovery forecast assumes the Strait of Hormuz will gradually reopen from March 2027, with shipping returning to pre-war conditions by October.

Saudi Arabia’s East-West pipeline carries oil to Yanbu on the Red Sea, allowing exports to avoid the Strait of Hormuz. The IMF said this had reduced the economic damage compared with some neighbouring countries.

Georgieva said the kingdom’s efforts to develop businesses outside oil had also helped protect its economy from the war’s impact.

She warned that poorer countries that depend on imported energy were among the hardest hit by rising costs. She urged governments to help people facing higher food and energy bills.

Source: www.euronews.com