SAUDI Arabia, the world's biggest exporter of oil, is a vital cog in the global economy and a key ally of the United States.
It produces about eight million barrels of oil every day, and recently promised George W Bush a crucial pre-election cut in prices. The US administration fears high petrol prices this summer could become a political liability ahead of November's presidential elections. Against such a backdrop, Saudi has become a prime target for the attentions of Osama bin Laden, the Saudi-born, anti-Western, Islamic extremist.
One of the most devout and insular countries in the Middle East, it has emerged from being an underdeveloped desert kingdom to become one of the wealthiest in the region thanks to its oil resources. It relies heavily on six million foreign workers to run the oil industry and other sectors.
Although al Khobar, the scene of the latest assault, has no production, export or refining facilities, Western oil firms have offices and housing in the city. Western oil firms said last night they were unlikely to pull out of the kingdom following the weekend violence.
The Saudi government said yesterday that the kingdom's vast energy network was running as normal after the attack. Senior Saudi oil officials met top Western oil executives in nearby Dhahran last night to reassure them about security.
The assault is the second attack on the kingdom's oil industry in less than a month. It has raised fears that already high oil prices, currently at more than $40 a barrel, could escalate further.
Ferhad Ibrahim, an expert in Middle Eastern affairs at the Free University in Berlin, said: ''I think an energy crisis would be unavoidable if Saudi output should drop below five million barrels per day. The Americans wouldn't be able to compensate for such a fall, they haven't reached their output goals in Iraq.''
However, Michael Rothman, chief energy strategist at Merrill Lynch in New York, said that although there could be a limited psychological reaction in oil markets, the al Khobar attack would not affect supply.
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