Energy Prices Spike after Saudi Oil Attack, US Blaming Iran

This image provided on Sunday, Sept. 15, 2019, by the U.S. government and DigitalGlobe and annotated by the source, shows damage to the infrastructure at at Saudi Aramco's Kuirais oil field in Buqyaq, Saudi Arabia. (U.S. government/Digital Globe via AP)

DUBAI, United Arab Emirates (AP) — Global energy prices spiked on Monday after a weekend attack on key oil facilities in Saudi Arabia caused the worst disruption to world supplies on record, an assault for which President Donald Trump warned that the U.S. was “locked and loaded” to respond.

U.S. officials offered satellite images of the damage at the heart of the kingdom’s crucial Abqaiq oil processing plant and a key oil field, alleging the pattern of destruction suggested the attack on Saturday came from either Iraq or Iran — rather than Yemen, as claimed by Iranian-backed Houthi rebels there.

Iran for its part called the U.S. allegations “maximum lies.”

The Houthis on Monday warned of more attacks on Saudi oil facilities and urged foreign companies doing business in the kingdom to stay away from its energy sites. Yahia Sarie, a rebel spokesman, said facilities such as the Abqaiq oil processing plant and the oil field hit this weekend could again “be targeted at any time.”

In Vienna, U.S. Secretary of Energy Rick Perry condemned what he called “Iran’s attack on the Kingdom of Saudi Arabia” in an address to the International Atomic Energy Agency’s general conference.

“This behavior is unacceptable and they must be held responsible,” Perry said of Iran. “Make no mistake about it, this was a deliberate attack on the global economy and the global energy market.”

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 U.S. need them.

But actions on any side could break into the open a twilight war that’s been raging just below the surface of the wider Persian Gulf in recent months.

Already, there have been mysterious attacks on oil tankers that America blames on Tehran, at least one suspected Israeli strike on Shiite forces in Iraq, and Iran has shot down a U.S. military surveillance drone.

Benchmark Brent crude gained nearly 20% in the first moments of trading Monday before settling down to over 8% higher as trading continued. A barrel of Brent traded up $5.33 to $65.55.

That spike represented the biggest percentage value jump in Brent crude since the lead up to the 1991 Gulf War that saw a U.S.-led coalition expel Iraqi dictator Saddam Hussein’s forces from Kuwait.

U.S. benchmark West Texas crude was up around 8%. U.S. gasoline and heating oil similarly were up over 8% and 7% respectively before markets opened in New York.

Saturday’s attack halted production of 5.7 million barrels of crude a day, more than half of Saudi Arabia’s global daily exports and more than 5% of the world’s daily crude oil production. Most of that output goes to Asia.

A worker writes a receipt at a gas station in Jiddah, Saudi Arabia, Monday, Sept. 16, 2019. (AP Photo/Amr Nabil)

At 5.7 million barrels of crude oil a day, the Saudi disruption would be the greatest on record for world markets, according to figures from the Paris-based International Energy Agency. It just edges out the 5.6 million-barrels-a-day disruption around the time of Iran’s 1979 Islamic Revolution, according to the IEA.

Saudi Arabia has pledged that its stockpiles would keep global markets supplied as it rushes to repair damage at the Abqaiq facility and its Khurais oil field.

Trump said the U.S. had reason to believe it knows who was behind the attack — his secretary of state had blamed Iran the previous day. He assured his Twitter followers that “we are … locked and loaded” depending on verification and were waiting to hear from the Saudis as to who they believe was behind the attack and “under what terms we would proceed!”

The tweets followed a National Security Council meeting at the White House that included Vice President Mike Pence, Secretary of State Mike Pompeo and Defense Secretary Mark Esper.

A U.S. official said all options, including a military response, were on the table, but said no decisions had been made Sunday. The official spoke on condition of anonymity to discuss the internal deliberations.

Trump’s “locked and loaded” comment mirrors similar remarks he made following Iran shooting down a U.S. military surveillance drone in June. However, the president said he pulled back from retaliating against Iran at the last minute.

In this Sunday, Sept. 15, 2019, photo released by Saudi Press Agency, SPA, Saudi Energy Minister Prince Abdulaziz bin Salman, center, shakes hands with staff during his visit of the Saudi Aramco plants one day after the attacks in Abqaiq, Saudi Arabia. (Saudi Press Agency via AP)

U.S. officials also offered highly detailed satellite photos of the Saudi sites that show damage suggesting the attack came from the north, where Iran or Iraq are, rather than from Yemen to the south. Iraq’s prime minister has denied the attack came from his country, where Iranian-backed Shiite militias operate. Iraqi Premier Adel Abdel-Mahdi said he received a call Monday from Pompeo, without elaborating.

Iranian Foreign Ministry spokesman Abbas Mousavi on Sunday called U.S. allegations “blind and futile comments.”

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

On Monday, Mousavi dismissed as mere “speculation” media reports about a possible meeting between Trump and Iranian President Hassan Rouhani on the sidelines of the U.N. General Assembly later in September. The U.S. has said it will remain open for talks with Iran but Mousavi said a Trump-Rouhani meeting was not on the agenda.

The U.S. satellite photos appear to show the attack on Abqaiq may have struck the most-sensitive part of the facility, its stabilization area. The Washington-based Center for Strategic and International Studies has said the area includes “storage tanks and processing and compressor trains — which greatly increases the likelihood of a strike successfully disrupting or destroying its operations.”

In this Sunday, Sept. 15, 2019, photo released by Saudi Press Agency, SPA, Saudi Energy Minister Prince Abdulaziz bin Salman, center, visits the Saudi Aramco plants one day after the attacks in Abqaiq, Saudi Arabia. (Saudi Press Agency via AP)

Stabilization means processing so-called sour crude oil into sweet crude. That allows it to be transported onto transshipment points on the Persian Gulf and the Red Sea, or to refineries for local production.

The attack “damaged five to seven spheroids and five out of ten stabilization towers,” said Fernando Ferreira, the director of geopolitical risk at the Washington-based Rapidan Energy Group.

Five “or so stabilization towers appear to be destroyed and will have to be rebuilt — this will take many months,” Ferreira said. “The sophisticated attack now seems likely to reduce Abqaiq’s 7 (million barrels of crude oil a day) capacity for an indefinite period” measured in months.

Saudi Aramco did not respond to questions from The Associated Press regarding damage at Abqaiq and the satellite images.

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By JON GAMBRELL Associated Press

Associated Press writers Zeke Miller in Washington; Tali Arbel in New York; Elaine Kurtenbach in Bangkok; Nasser Karimi in Tehran, Iran; Dave Rising in Berlin; Samy Magdy in Cairo and Qassim Abdul-Zahra in Baghdad contributed to this report.

A currency trader walks by the screens showing the foreign exchange rates at the foreign exchange dealing room in Seoul, South Korea, Monday, Sept. 16, 2019. Asian stock markets were mixed Monday after crude prices surged following an attack on Saudi Arabia’s biggest oil processing facility. (AP Photo/Lee Jin-man)
This image provided on Sunday, Sept. 15, 2019, by the U.S. government and DigitalGlobe and annotated by the source, shows damage to the infrastructure at Saudi Aramco’s Abaqaiq oil processing facility in Buqyaq, Saudi Arabia. The drone attack Saturday on Saudi Arabia’s Abqaiq plant and its Khurais oil field led to the interruption of an estimated 5.7 million barrels of the kingdom’s crude oil production per day, equivalent to more than 5% of the world’s daily supply. (U.S. government/Digital Globe via AP)
This image provided on Sunday, Sept. 15, 2019, by the U.S. government and DigitalGlobe and annotated by the source, shows damage to the infrastructure at Saudi Aramco’s Khurais oil field in Buqyaq, Saudi Arabia. The drone attack Saturday on Saudi Arabia’s Abqaiq plant and its Khurais oil field led to the interruption of an estimated 5.7 million barrels of the kingdom’s crude oil production per day, equivalent to more than 5% of the world’s daily supply. (U.S. government/Digital Globe via AP)
A Saudi family walk past a giant poster of Saudi Crown Prince Mohammed bin Salman, at a shopping mall in Jiddah, Saudi Arabia, Sunday, Sept. 15, 2019. The weekend drone attack on one of the world’s largest crude oil processing plants that dramatically cut into global oil supplies is the most visible sign yet of how Aramco’s stability and security is directly linked to that of its owner — the Saudi government and its ruling family. (AP Photo/Amr Nabil)
Storage tanks are seen at the North Jiddah bulk plant, an Aramco oil facility, in Jiddah, Saudi Arabia, Sunday, Sept. 15, 2019. The weekend drone attack in Buqyaq on one of the world’s largest crude oil processing plants that dramatically cut into global oil supplies is the most visible sign yet of how Aramco’s stability and security is directly linked to that of its owner — the Saudi government and its ruling family. (AP Photo/Amr Nabil)
FILE – In this Saturday, Sept. 14, 2019 file photo, made from a video broadcast on the Saudi-owned Al-Arabiya satellite news channel, smoke from a fire at the Abqaiq oil processing facility fills the skyline, in Buqyaq, Saudi Arabia. The weekend drone attack on one of the world’s largest crude oil processing plants that dramatically cut into global oil supplies is the most visible sign yet of how Aramco’s stability and security is directly linked to that of its owner — the Saudi government and its ruling family. (Al-Arabiya via AP, File)

2 Comments

  1. Apparently, the White Supremacist Neo Nazi government of America and its evangelical population lust for more blood and money from the Middle East continues by fabricating just another false flag narrative to provide a pretext to like the “the war on terrorism” to rape the treasury of America to bomb , invade, and occupy another independent country of the world ..to loot their oil and resources!.

    Donald Trump and lindsey Graham..all certified maniacs tell us that depending on what the Saudi war criminals, and currently commiting genocide in Yemen tell us…will determine if we again slaughter more human beings! This is the country where freedom of religion does not exist, who dismember journalists, and fund and support ISIS and Al Queda jihadist in Syria, Yemen, libya, etc etc…………………..1

    “There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the[Saudi Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!”

    According to Reuters reports the drone attacks will impact up to 5 million bpd of oil production, which
    suggests that the price of oil—already severely depressed—is set to soar when trading reopens late on Sunday, just what the upcoming Aramco IPO desperately needs, which in turn has prompted some to wonder if the “Yemen” attack on Saudi Arabia wasn’t in fact orchestrated by Saudi and U.S oil interests!. 

  2. Con’t ..

    Trump and Grahams comments reveal ..how far we have fallen as a democracy ..which takes away the constitutional rights of Americans to approve the waging of wars without evidence and thru Congressional approval but now relegates criminal wars decisions … to the word of a degenerate foreign country and Neo Nazi members of the U.S government..who have a proven record of lying to the American public to slaughter 500,000 Iraqi’s
    Meanwhile, the corporate media and TNH, as should be expected, is placing the blame indirectly on Iran.

    From the beginning of the Saudi campaign to bomb the daylights out of Yemen, creating one of the worst humanitarian crises in recent memory, the corporate media has stated as an indisputable fact the Houthis are an Iranian proxy doing the bidding of the mullahs in Tehran. 

    Again these are the corrupt fake news media ..who are sponsored by the same lunatics who own our government, and have sold all their lies to the public!

    What is alarming ..after being caught red handed in their lies about the false “War on Terrorism” to invade and break international laws to occupy and enact regime change to install puppet regimes for the likes of Lindsey Graham, Donald Trump and most of the war hawks of the Democratic and Republican party…they continue to demonstrate blatant act of treason by lying to the public ..which reflects a government who considers Americans impotent to stop them! They don’t even hide their crimes!

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