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Potential Missile Strikes on Saudi Oil Refineries Reminds Why You Need Gold

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Potential Missile Strikes on Saudi Oil Refineries Reminds Why You Need Gold

Photo Courtesy of Al Jazeera

Over the weekend on Saturday night, the news media broadcast pictures of fiery conflagrations at the Riyadh airport in the capital of Saudi Arabia. The Saudis admitted that there had been a missile strike, but claimed they had shot down the missile with their U.S. provided Patriot Missile batteries. It represented a major escalation of a conflict that has been going on in the Arabian Peninsula over the last two years.

Gold is the best defense for your portfolio when there are significant attacks against oil producing nations. These situations remind why you need to be aware of the various IRA-approved metals and obtain some IRA-approved gold to safeguard your hard-earned assets. Gold protects against market turbulence like no other historically proven asset. Now is a good time to learn about a gold IRA rollover versus a transfer.

Yemen Rebels Attack Saudi Capital Airport with Missile Strike

It was Saturday night when the Yemeni Defense Ministry announced that it had targeted the capital of Saudi Arabia using a ballistic missile. This department of the war-ravaged nation of Yemen is controlled by the Houthi rebels whom the Saudis have been battling since 2015.

The Saudis claim that they intercepted the missile over the northeast of Riyadh, per their Ministry of Defense and the statement it put out on state-backed Al-Arabiya TV. The Yemeni Defense Ministry opined that the strike actually represented a great success as it “shook the Saudi capital.” It stated that they had fired a longer range type of missile known as the Burqan 2H.

In either case, it was hard to ignore the images of blazing fires either at or around the airport on television screens. More disturbing still is the fact that this was the first time such an attack has come into the core of the capital of Saudi Arabia. If the Yemeni rebels are to be believed, it will not be the last one either. Mohammed Abdul Salam, the Houti spokesman, gave this chilling announcement:

“We previously warned that capitals of countries attacking Yemen will not be safe from our ballistic missiles. The Saudi regime cannot hide the heavy fires that was seen by thousands of Saudi nationals in the King Khalid Airport premises as a result of the Yemeni missile. This is not the end. Saudi cities will be a continuous target. We are entering a new phase.”

Naturally the Saudi's retailed the same day with airstrikes against Sanaa the capital of Yemen. It was the first time a night attack occurred there in weeks. The Saudis have been spearheading the military intervention in Yemen to drive out the Houthi rebels that overthrew the internationally legitimate government during 2015.

Who Was Really Behind the Yemeni Missile Attack?

While the obvious perpetrator of the assault was the Houthis, the Saudis and international analysts doubted the rebels could carry off such a sophisticated missile attack on their own. Saudi Arabia and its coalition partners immediately accused an international power of being behind the attack with their official statement on Saudi Arabia's state television al-Ekbariya that the act of firing a ballistic missile at the capital of Saudi Arabia:

“threatens the security of the Kingdom and regional and international security.”

By the end of the weekend, the Saudi government had fingered Iran in the assault on their critical international airport, declaring that it could be interpreted as an act of war. Their Saudi Press Agency statement appeared early Monday morning:

“The missile– which was fired by Iranian backed Houthi rebels in Yemen on Saturday and intercepted by Saudi air defenses– was a direct military aggression by Iran. The kingdom has the right to defend its land and people.”

In fact the spokesman for the Saudi-led coalition took it a step further by saying in an interview on the state run station that

“Iran provided Yemen's Houthi milita with ballistic missiles, launchers, explosive-laden drones, and sea mines.”

The Iranians have vocally denied this connection. General Mohammad Ali Jafari the Iranian Revolutionary Guards commander claimed that the missiles were Yemeni and had an improved range. Politics of the war aside, no one is denying that this latest missile attack on the Kingdom has dramatically increased the tensions between Iran and Saudi Arabia. U.S. President Trump backed the Saudis over the missile attack. He has clearly sided with them over the Iranians that he labels a “rogue state.”

These Were Not the First Such Missile Strikes On Saudi Arabia

Though the attack by itself is disturbing, it is not the first missile-based assault on the world's second largest conventional oil producer. It was only this past March that the Saudis announced  Yemen had fired four ballistic missiles which they intercepted. Only two months after this the rebels in Yemen fired another missile towards Riyadh that the Kingdom's military took down in the south of the country.

January of 2017 saw other missiles fired at the Red Sea Island Zuqar's Saudi base. Each of these were dangerous in their own right and represent a growing trend of missile threats to Saudi Arabia. They are still not the most dangerous threat (of this situation) to international financial markets.

The Real Danger Is That A Saudi Oil Refinery or Field Will be Hit

On Saturday, July 22nd, the Houthi rebels claimed that they managed to get one of their Burkan-2 ballistic missiles to hit a Saudi oil refinery off Yanbu along the coast. The Saudis responded by saying this was not a missile strike. They claimed it was a fire that hot weather started hitting a power transformer close to the oil refinery entrance. Whatever damage the facility suffered, the Saudis were very tight-lipped about it.

This is so critical because the Saudis possess the second largest proven conventional oil reserves on earth. These are greater than 260 billion barrels. This represents approximately a fifth of the global conventional oil reserve total. In 2016 their national oil company was the largest producer in the world as this graph shows:

Chart courtesy of CNNMoney

The Saudis are also the world's swing oil producing country that has produced more than 10 million barrels per day in critical times of energy market need (as in 1980, 2006, and 2008). A large portion of these exports and reserves are found in only a few extremely big oil fields.

Not only their refineries but also the oil fields are  in danger of a missile strike that could set off devastating fires for the Kingdom. You can be sure this would reverberate dramatically throughout world energy markets.

Gold Is the Asset You Turn To In Such Scenarios

It argues the real danger for global energy and stock markets. We are only one Yemeni missile strike away from a substantial spike in global oil prices. They could quickly be back at over a hundred dollars a barrel if significant fears of a Saudi oil export slowdown erupt.

This is why you need to acquire gold now to help safeguard your investment and retirement accounts. Gold makes sense in an IRA. When energy markets soar higher, gold has a tendency to rise as well. If global stock markets take a plunge or suffer a long overdue correction from this type of geopolitical chaos, gold will be the bedrock that can steady your portfolio as it protects in times of market crisis.

The main thing to remember is that the world gold markets are tiny compared to enormous ones like stocks, bonds, and currencies. This is why you need to secure yours now before everyone else decides to get some. One option is to buy gold in monthly installments.

David Crowder

About David Crowder

W.D. Crowder is an American published author. His background and areas of expertise include history, economics, expatriate living, international relations, investments and personal finance. A widely read and top of his class graduate of Stetson University, he obtained his bachelor of arts degree in History with minors in Latin American Studies and International Relations and a special emphasis in Economics. He was President of his Phi Alpha Theta (National History Honors Fraternity) Stetson University chapter and a Phi Beta Kappa (National Honors Fraternity) member.