Trump authorizes oil release from strategic reserve after Saudi attack

Tuesday, 17 Sep, 2019

The United States has issued satellite images and cited intelligence to back its claim that Iran was behind attacks on Saudi oil facilities.

Here's what to know about the drone attacks in Saudi Arabia and what lies ahead as the USA grapples with an attack against a key ally.

Russian President Vladimir Putin raised a few approving eyebrows in Turkey by quoting from the Koran to urge an end to the war in Yemen that has been waged there for years by a coalition of Muslim countries led by Saudi Arabia.

U.S. President Donald Trump signaled that he was willing to launch a strike to answer the attacks.

You can't ignore attacks on the largest petroleum facility on the planet ...

Sunni Muslim Saudi Arabia has previously accused Shi'ite Muslim Iran, which lies across the Gulf, of carrying out attacks on its oil facilities, charges Tehran denies. But "satellite imagery can't show you where the attack originated from", said Joe Bermudez, an expert at the Center for Strategic and International Studies who examined the images. The officials say the pattern of destruction suggested that the attacks came from either Iraq or Iran - and not Yemen.

"That was an attack on Saudi Arabia", he said.

Yemen's Houthi rebels, who have been targeted by a Saudi-led coalition since March 2015 in a vicious war in the Arab world's poorest country, maintain they launched 10 drones that caused the extensive damage.

The Houthis have used drones since the start of the conflict, including models that are similar to Iranian drones. The Houthi rebels have links to Iran.

The remarks seemed to be aimed at keeping the president's options open on a response to the attack, which knocked out half Saudi production, 5% of global production and triggered a spike in oil prices.

The attacks were claimed by the Houthi rebels, but US Secretary of State Mike Pompeo has blamed Tehran for the attacks.

"Continuing to ratchet up the pressure is in Iran's interests as long as it doesn't lead to war, especially if the attack is de facto tied to Iran but can not or will not be specifically attributed to the Islamic Republic". "The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression", Pompeo wrote. It means the assault may have come from closer to the oil fields, either from Iraq, directly from Iran or other sources.

Iran has rolled back its commitments under the nuclear deal, while attacks on a Saudi oil pipeline and tankers off the UAE coast in May this year were linked by the United States to Iran and Yemen's Houthis.

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 U.S.is "safer and more secure domestically from energy independence".

"The Americans adopted the "maximum pressure" policy against Iran, which, due to its failure, is leaning toward 'maximum lies, '" Mousavi said.

High-precision attacks on critical Saudi Arabian oil infrastructure would compel major consumers of the commodity to diversify their energy sources to places like Canada, but the oilsands are suffering from their own geopolitical risks, according to analysts. How long the rise in oil prices lasts will depend on how long it takes to restore Saudi production.

Israel is prepared for the possibility it might be drawn into any U.S. Benchmark Brent crude, which works as a reference point in the global oil marketplace, gained about 20% on Monday, its biggest jump since the 1991 Gulf War, the AP reports.

West Texas Intermediate rose 8.9% to $59.75 in Asian trading.

Oil prices surged by as much as 19 per cent before coming off peaks.

By midday on Monday, oil prices had increased by more than 10 percent on world markets, to more than $60 a barrel. The U.S. has no treaty obligation to defend Saudi Arabia.

An anonymous USA official told the Associated Press that no decisions were made Sunday, but that all responses, including military action, are on the table.

He added that "despite Iran's malign efforts, we are very confident that the market is resilient and will respond" and said that Trump has authorized the release of strategic oil reserves should the USA need them.

The attacks have possibly curtailed as much as one million barrels per day of Aramco's refining capacity, Energy Aspects said, although this could not be confirmed and it was not clear to which Saudi Aramco refineries it was referring.