Saudi oil strikes: Will Gulf 'powder-keg' detonate?

Andrew Cummings
September 17, 2019

Global energy prices spiked Monday by a percentage unseen since the 1991 Gulf War after the attack on key Saudi oil facilities caused the worst disruption to world supplies on record, further fuelling heightened tensions between Iran and the US.

Saudi energy minister Prince Abdulaziz bin Salman will hold a news conference at 8pm local time.

"But Saudi officials said the United States didn't provide enough to conclude that the attack was launched from Iran, indicating the USA information wasn't definitive", the WSJ added.

Yemen's Iran-aligned Huthi rebels claimed responsibility for the operation but Washington has squarely blamed Iran.

"It's not a great thing to say, but if something like this is going to happen, at least it happened at a time when there is a surplus in crude and USA production is growing at such a fast clip", said Tony Nunan, Tokyo-based oil risk manager at Mitsubishi Corp. Another concern is the prospect of another flare-up in tensions in the Middle East.

The Huthis said they had fired 10 drones at the Saudi installations, and Iranian President Hassan Rouhani said the attacks were in self-defence.

"If the United States takes back its words and repents after pulling out of the JCPOA. then it can join the other countries party to the JCPOA and talk to Iran along with the other countries", he said, using the deal's formal title.

Officials at state oil company Saudi Aramco have become less optimistic on the pace of output recovery, telling a senior foreign diplomat they face a "severe" disruption measured in weeks and months and informing some customers that October shipments will be delayed. However, American officials claim Iran, Saudi Arabia's regional rival, is to blame. The trajectory would imply that the launch point of the attack was being masked.

Downplaying any talk of imminent USA military action, Vice-President Mike Pence's chief of staff, Marc Short, told reporters at the White House that Trump's "locked and loaded" was "a broad term that talks about the realities that" the "safer and more secure domestically from energy independence".

"The kingdom is capable of defending its land and people and responding forcefully to those attacks", the statement added.

"According to the International Energy Agency, higher oil production from non-Opec countries will continue to post a challenge to the industry in 2020".

"Everyone expected the prices to rise somewhat on Monday, because the price takes into account uncertainty and risks". "The policy of "maximum pressure" against the Iranian nation is worthless and all Islamic Republic of Iran officials unanimously believe there will be no negotiations with the U.S. at any level", he said, quoted on his official website.

Sensing a commercial opening, President Vladimir Putin said Russia was ready to help Saudi Arabia by providing Russian-made air defence systems to protect Saudi infrastructure.

US officials say they believe that the attacks came from the opposite direction, possibly from Iran itself rather than Yemen, and may have involved cruise missiles.

"I don't think there's a great independent Saudi capability to respond", he said.

Other reports by iNewsToday