As Saudi Aramco presses on with plans to pitch its initial public offering to analysts, strikes on key oil facilities has heightened investor fears about the prospect of more attacks in the future. “They are the best assets in the world but I have no interest in owning Aramco given the security risks,” said Ben Cleary, Asia chief executive officer at Tribeca Investment Partners. “The issues in the Gulf don’t seem like they are going any time soon.” In an attack blamed by the US on Iran, a swarm of drones laden with explosives set the world’s biggest crude-processing plant ablaze, cutting the kingdom’s oil production in half. Iran denied responsibility, which was instead claimed by Iranian-backed Houthi rebels in Yemen. Houthis on Monday threatened more attacks on oil installations in Saudi Arabia. The sprawling state-owned company controls one-fifth of the globe’s petroleum reserves and pumps more crude than the top four publicly-traded oil companies combined. Aramco officials are growing less optimistic about a rapid recovery in oil production, a person with knowledge of the matter said. Why China’s Sinopec and Saudi Aramco cross paths in the international capital market Crown Prince Mohammed bin Salman, the architect of the IPO, said he expects Aramco to be valued at over US$2 trillion. Analysts, however, see US$1.5 trillion as more realistic, while supply disruption stemming from the strikes over the weekend could further widen the gap in valuation. Floating a minority stake of the oil giant, officially known as Saudi Arabian Oil Co, is part of Prince Mohammed’s efforts to modernise and diversify the country’s economy. “It will be all but impossible to proceed with the IPO if there are ongoing attacks,” said Robin Mills of Qamar Energy. “Valuing Aramco like Shell or ExxonMobil gets us to about US$1.2 trillion-US$1.4 trillion. But that would drop significantly if we apply company-specific risk factors.” The attack comes as listings from the energy sector are at a 16-year low globally. A weakening outlook for global oil demand, a flood of new supply from shale fields in the US and growth in cleaner energy sources have been weighing on crude markets. Volatile commodity prices aside, a number of large global asset managers are shunning fossil fuel assets, impacting demand for energy stock offerings. Oil prices surged by the most on record to more than US$71 a barrel after the strikes removed about 5 per cent of global supplies. The jump reverberated across asset classes, with gold rising about 1 per cent. S&P 500 futures fell as much as 0.8 per cent but had pared the loss to 0.4 per cent as of 10:30am London time, while Europe’s Stoxx 600 Index was down 0.5 per cent. Meanwhile, Saudi equities surprised market watchers by rising as much as 1.1 per cent, spurring speculation that government funds may be supporting the assets. Stocks on Sunday tumbled 3.1 per cent within the first minute of trading before ending the day with a 1.1 per cent loss. Meanwhile, US President Donald Trump warned that the US was “locked and loaded” to respond to attacks on Saudi oil infrastructure that Washington blamed on Iran. It is the first time the president has hinted at a potential American military response to the drone attacks, which slashed Saudi oil production by half and led both the kingdom and the US to announce they may tap their strategic reserves. “There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!” Trump tweeted. Russia on Monday called on “all countries to avoid hasty steps or conclusions that could exacerbate the situation” while the European Union stressed all sides should show “maximum restraint”. China also urged the US and Iran to “exercise restraint... in the absence of a conclusive investigation or verdict.” Additional reporting by Agence-France Presse