Saudi Oil Attacks: Saudis say global market won't be affected

Monday, 16 Sep, 2019

Trump said he had approved the release of oil from the U.S. Strategic Petroleum Reserve if needed. Wherever the attacks were launched, however, they believe Iran is to blame.

"I have also informed all appropriate agencies to expedite approvals of the oil pipelines now in the permitting process in Texas and various other States", the president said in a series of tweets.

While most eyes are focused on the attack's impact on oil prices, some traders were already calculating its influence on the global economy should prices remain at elevated price levels for weeks or months.

Smoke billowed from the Saudi Aramco oil facility after drone attacks sparked two fires.

"Such a brazen attack by an Iranian proxy on the crown jewel of the Kingdom of Saudi Arabia's energy system will raise the overall geopolitical risk premium", Mr McNally told Lloyd's List.

"We hope they will exercise self-restraint", she said.

The Islamic Republic's Revolutionary Guard says its forces could strike USA military bases across the Middle East with their arsenal of ballistic missiles.

"Today's attack on the Abqaiq processing facility constitutes a paramount oil bullish, equity bearish, and global growth negative risk", said Bob McNally of the Washington DC-based Rapidan Energy Group.

Vice President Mike Pence arrives to the West Wing of the White House, Sunday. Oil prices surged more than 10% late Sunday.

Washington has also released new evidence to back up its allegation that Iran was responsible for the assault amid heightened tensions over Tehran's collapsing nuclear deal. "When these contacts come too close, when forces come into contact with one another, it is possible a conflict happens because of a misunderstanding".

Iranian-backed Houthi rebels in Yemen, where a Saudi-led coalition is bogged down in a five-year war, claimed responsibility for Saturday's strikes, which targeted two plants owned by state energy giant Aramco.

"If we want there to be real security in the region, the solution is that America's aggression cease", Iran's president added, before leaving for Ankara to attend a trilateral meeting on Syria with Turkey and Russian Federation.

Saudi state oil firm Aramco and Bapco did not immediately respond to a request for comment.

Saudi Arabia scrambled Sunday to restore operations at its key oil fields after drone attacks cut the kingdom's production in half, while also saying it would tap its vast reserves to shore up exports to the world market.

Oil prices surged as much as 19 per cent in early Asian trade on Monday on worries over global supply and tensions in the Middle East.

Saudi Arabia has spent billions on military hardware but recent events have underscored the vulnerability of its infrastructure to attack. "We warn companies and foreigners against being near the plants that we struck because they are still in our sights and could be hit at any moment". The Iraqi statement said Pompeo and Abdul Mahdi had agreed to share intelligence over the attack.

U.S. officials previously alleged at least one recent drone attack on Saudi Arabia came from Iraq, where Iran backs Shiite militias.

This drew an angry response from Tehran, where a foreign ministry spokesman said: "Such fruitless and blind accusations and remarks are incomprehensible and meaningless".

Since the withdrawal, the United States has slapped crippling sanctions on Iran as part of a campaign of "maximum pressure".

This image shows a pre-strike overview at Saudi Aramco's Abaqaiq oil processing facility.

Abdul Mahdi's office did not specify what was discussed.

"We assess that Abqaiq's importance to the global oil market remains underappreciated", said the firm's report.

Hajizadeh, who leads the country's aerospace program, gave an interview published across Iranian media on Sunday that discussed Iran's downing of a U.S. drone in July.

"We believe it is counterproductive to use what happened to increase tensions around Iran in line with the well-known USA policy", the Foreign Ministry said.