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Bloodbath after al Qaida slashes global oil vein
An unidentified body inside a car at one of the attack sites in Khobar in Saudi Arabia on Saturday. (AFP)

Khobar, Saudi Arabia, May 29 (Reuters): Suspected al Qaida militants killed at least 16 people, including westerners and an Indian, and took 50 foreigners hostage in an attack on the world’s biggest oil exporter.

Security forces stormed the Oasis housing compound, where the hostages were being held, in the eastern city of Khobar after the militants — spraying gunfire at several buildings — killed at least nine Saudis and seven foreigners.

“They are holding 50 foreign hostages. There are Americans, but there are more Italians. There are also Arabs,” said a compound manager. Security sources said the Arab hostages were Christians.

A policeman said the militants were using the hostages as human shields and that officials were trying to negotiate.

An Indian, an American, a Briton, an Egyptian, two Filipinos and a Pakistani were among the dead, the sources said.

The attack in the main Saudi oil-producing region was the second in less than a month to target the kingdom’s vital fuel industry and westerners who form a large part of its workforce.

Saudi Arabia is the world’s largest crude exporter and oil markets have been on edge over the possibility of a militant strike that would disrupt supplies. The unease has already helped push world prices to $40 a barrel.

“This is close to the nerve centre of the Saudi oil industry, (state oil firm) Aramco headquarters in Dhahran,” said Yasser Elguindi, an analyst in New York. “It could have a devastating impact on the oil market when we reopen (on Tuesday) after the Memorial Day weekend.”

If the rocketing crude oil prices are not reined in, it will have ramifications for the new Indian government, too. The Congress-led government will then find it difficult to stave off domestic fuel price increases that were put off because of elections.

“This (the attack) is clearly targeting the oil sector,” said a senior western executive in the Saudi capital Riyadh.

Employees of Shell, Honeywell and General Electric lived in one of the compounds. The Oasis residence has housed executives from leading oil firms Royal Dutch/Shell, Total and Lukoil.

A statement purportedly from Saudi-born Osama bin Laden’s al Qaida network was posted on Islamist Internet sites claiming responsibility for the attack, the third on foreigners in less than a month in the birthplace of Islam.

Al Qaida has vowed to destabilise the US-allied Saudi kingdom. The US embassy iterated a call to its citizens to leave the kingdom after the attack.

An employee at the Oasis compound said the militants, wearing military uniforms, had asked residents to show their identity cards to find out their religions.

“(The militants) went around asking people if they were Christians or Muslims. They got hold of an uncle of a friend and asked him to get his residence permit, but he fled,” said the employee.

The attack occurred two days after the top al Qaida leader in the kingdom, Abdulaziz al-Muqrin, issued a battle plan for urban guerrilla war, specifying strategies to topple the royal family.

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