Saudi oil facility attacked, Oil price spike, what next?

Abqaiq Saudi Oil

Early Saturday (September 14, 2019), the Khurais oilfield operated by Saudi Aramco, the state-owned oil giant, and the Abqaiq oil processing facility was attacked by a number of drones. Saudi officials say the strikes have cut production by 5.7 million barrels per day – about 50% of their total output and 5% of global supplies.

Yemen’s Iranian-backed Houthi rebels have claimed credit for the attacks, but U.S. Secretary of State Mike Pompeo directly blamed Iran. Iran denied Sunday U.S. accusations that it was behind drone attacks. In a Twitter post, Trump didn’t name who was responsible, but said the U.S. “is locked and loaded.”

Do the Houthi rebels in Yemen lack the drones, missiles, or expertise to attack infrastructure inside Saudi Arabia? In 2018, a United Nations panel of experts on Yemen examined the debris of missiles fired from Houthi-controlled areas of Yemen into Saudi Arabia and concluded there was a high probability the weapons were shipped in components from Iran. If the drones really did come from Yemen, the Saudi’s would have had at least 5 hours to see and react to the attack, based upon the drone best speed of 120mph. Coming from Iran with even better technology, maybe an hour. One would think the Saudi defense could have done better to prevent the attack if they did come from Yemen.

Some reports show satellite images appear (see feature photo) to show approximately 17 points of impact on key infrastructure at the site after Yemeni Houthis claimed a successful drone strike of up to 10 unmanned aerial vehicles with explosives. One source suggests that the Abqaiq oil facility will take time; “We think this is a month’s fix, not days or weeks.” Neither Riyadh officials nor the state-run oil giant Saudi Aramco has yet to confirm the extent of the damage. Aramco’s president and CEO Amin Nasser announced Sunday, “Work is underway to restore production, and a progress update will be provided in around 48 hours.” The thinking here is that to have 17 points of impact from only 10 drones would be a dubious claim by Houthi rebels in Yemen.

Other things of note for the conspiracy theorists. Saudi Arabia moves forward to take Saudi Aramco public in an IPO in a major shakeup of the kingdom’s energy sector. Crown Prince Salman has pushed for a valuation of as much as $2 trillion. The other factor of note is that Benjamin Netanyahu is in a political fight of his life, elections in a few days. Netanyahu is talking about the annexation of more settlements, security issues, and an ever-present elusive peace deal.

Oil 16-09-2019

The Oil price did spike near 20% after markets opened, after markets being closed over the weekend – the largest recent Oil spike we have seen in recent years. There are two things at play here. First, Oil supplies have been elevated. Along with a potential downturn in the global economy, Oil would normally be under pressure.

The other is that is the attack, as bad as it was, the damage is likely to be repaired, at least partially, in the next several weeks. There is already a lot of Oil in the global shipping pipeline, and Trump stands ready to open the strategic petroleum reserve. News Forecasters’ view is that there will be a temporary spike and elevation of prices. Hedgers will be quick to take advantage of this price rise, and prices may comeback and even go lower over time. If a full-scale Saudi Iranian war occurred, we would come back to this assessment.

How likely full-scale Saudi Iranian war? What’s in it for Iran at this time? Given that Yemen may not have had the capability to make the drone strikes with the results we have seen. Given that Trump was moving toward a softening position with Iran, wanting to talk to the Iranian leader Hassan Rouhani. Given the financial issues with the Saudi Aramco IPO. Given the election in Israel with an ailing powerful prime minister. Given that the Necons are furious with Trump’s peace overtures to Iran – the firing of John Boulton. If you were ever going to put your tin foil hat on and call a false flag event, this would be it. Is the deepstate is trying to drag Trump into a divisive war ahead of the 2020 presidential elections? We shall see.

News Forecasters believes that the U.S., with coalition partners, may make a limited retaliatory attack at best, but no Saudi Iranian war is coming unless a misstep event would occur.

A video presentation of this subject:

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