Oil slips as market assesses fallout from Saudi attack

Wednesday, 18 Sep, 2019

"Production will be back to normal by the end of September".

Over the weekend, there were attacks on the Saudi Arabian oil industry. It was the biggest single-day jump in years due to the damaging attack.

Oil prices soared as much as 20 per cent to above $71 a barrel as markets reopened after a major attack on Saudi Arabia's oil infrastructure.

Brent crude was down $3.72 U.S., or 5.4 per cent, at $65.30 a barrel by 8:50 a.m. ET. United States oil, West Texas Intermediate, was down 5.5% to $59.5 a barrel.

Iran has denied being behind the attacks, which knocked out half of Saudi Arabia's oil production.

Yemen had to be discounted, according to the secretary of state's predatory logic, because the Houthi rebels, who control most of the country, had claimed responsibility for the attacks and had a clear motive-given the kingdom's near-genocidal war against Yemen's civilian population-for carrying them out.

Saudi Arabia's council of ministers said the cabinet had reviewed the damage caused by the attacks on the Aramco installations, and it called on the world's governments to confront them "regardless of their origin".

"I'm not looking to get into new conflict, but sometimes you have to", Trump said.

The Middle East is therefore on a war footing. The president told supporters in New Mexico that he is weighing his options, one day after tweeting that the U.S.is "locked and loaded".

While it has built its own missile arsenal, experts say Iran's armed forces would suffer in a head-to-head military confrontation.

Saudi Aramco is firing up idle offshore oil fields - part of its cushion of spare capacity - to replace some of the lost production, a person familiar said earlier.

A recent report by Kotak said that in light of the sharp rise in worldwide crude oil prices, Indian oil marketing companies (OMCs) may increase the retail price of diesel and gasoline by Rs 5 to 6 per litre in the following fortnight.

Brent sank more than 7 per cent during the news conference.

Saudi Arabia, which has supported tougher US sanctions on Iran, said an initial investigation showed the strikes were carried out with Iranian weapons.

Iran has retreated from full compliance with the deal since the USA pullout, exceeding limits on uranium enrichment.

On Tuesday, Iranian Supreme Leader Ayatollah Ali Khamenei ruled out any negotiations with the USA and accused Washington of exerting a policy of "maximum pressure" against the country.

Iranian state TV quoted Khamenei as saying this is the position of the entire leadership of the country.

Strains between Washington and Tehran have risen more in recent months after attacks on tankers in the Gulf that the United States blames on Tehran, and Iran's downing of a US military drone that prompted preparations for a retaliatory air strike that Trump says he called off at the last minute.

At a G7 summit in France last month, Trump suggested a meeting with Iranian President Hassan Rouhani could happen within weeks, which would mark a diplomatic coup for Macron.

United States strikes against Iran carried out under the pretext of retaliation for the attacks on Saudi Arabia can trigger Iranian counterstrikes, sending United States warships to the bottom of the Persian Gulf and wreaking havoc on American military bases throughout the region.

Calling US claims "maximum lies", a commander in Iran's paramilitary Revolutionary Guard reiterated its forces could strike US military bases across the Mideast with their arsenal of ballistic missiles.

Saudi Arabia, which has bought huge quantities of USA weaponry, is considered a strategic ally in the region, second to Israel, another bitter foe of Iran.

Saudi Arabia also called on the worldwide community "to shoulder its responsibility in condemning the perpetrators" and "clearly confronting" those behind the attack.

The JCPOA, or Joint Comprehensive Plan of Action, is most commonly known as the Iran nuclear deal.