Saudi attacks send oil prices soaring

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Pakistani Prime Minister Imran Khan

Saudi Crown Prince Mohammed bin Salman received a phone call from Pakistani Prime Minister Imran Khan on Monday who expressed Pakistan’s “support” with the Kingdom,?state-media Saudi Press Agency (SPA) reported.

According to SPA, Khan said Pakistan stands with the Kingdom “in confronting these sabotage acts, which threaten the global economy and the Kingdom’s security.”

President Trump on Monday downplayed the dangers of the attack on Saudi Arabian oil facilities wreaking havoc in international?oil markets.

He said the US is well positioned because of both the strategic petroleum reserve and US energy output.?

President Trump again addressed the attack on Saudi Arabian oil facilities and Iran’s alleged role in the attack as he left the White House for New Mexico on Monday.

The President said he’s on the same page as Secretary of State Mike Pompeo and is looking at all the intelligence coming in.?

“I think we’re the same. I think we just want to find out the final numbers and see. You look at a vector, and you look at … there are lots of different things we can look at David and we’ll know for certain over the next very short period of time,”?Trump said.

And once everything is analyzed, he said, “Well then we’re gonna decide what sort of response there would be.

Trump then was asked what kind of response there would be, and he clarified the question saying, “Would this be proportionate, is that what you’re asking. I would say, ‘yes.’”

He also said the stock market has “been holding pretty firm considering what happened with respect to Saudi Arabia.”?

The Ministry of Foreign Affairs of Saudi Arabia issued a statement on Monday saying initial investigations show Iranian weapons were used in the attack and investigations are ongoing to determine the source of the attack.

The statement is similar to remarks made earlier on Monday by Saudi-led coalition spokesperson Lieutenant Colonel Turki al-Malki.?

The MOFA statement, which was posted on Saudi’s state news agency SPA, also thanked the international community for condemning and denouncing the Saturday attack and invited the UN and international experts to participate in the investigation.?

President Trump said Monday that “it’s looking like” Iran was behind the recent oil attack in Saudi Arabia, but wouldn’t definitively announce that the country was behind it.

Trump said he doesn’t want war with Iran.

“I don’t want war with anybody,” the President said, but added that the US was prepared for any war ahead. “We’d certainly like to avoid it.”

Asked about what options he’s looking at, Trump said he wasn’t looking at any, emphasizing that the US still needs to confirm who perpetrated the attack.

On a United Nations General Assembly meeting with Iranian president Hassan Rouhani, Trump said: “I have no meeting scheduled. I know they want to meet. I know they’re not doing well as a country.”

Trump said Secretary of State Mike Pompeo and others will be heading to Saudi Arabia “at some point.” He also said they’d be making a statement soon.

“But they also know something that most people don’t know as to where it came from. Who did it … we pretty much already know,” Trump said.

The UK has condemned the “attack on the Aramco oil facilities in Saudi Arabia,” British Foreign Secretary Dominic Raab tweeted on Monday.

Iranian President Hassan Rouhani said that the “root cause” of the oil attack “goes back to the Yemen problem.”

Rouhani spoke at a news conference with his Russian and Turkish counterparts in Ankara Monday, and was responding to a question from a reporter of whether or not the attack was discussed during the summit.

Rouhani did not respond directly to claims from the Saudi-led coalition that the weapons used in Saturday’s attack were Iranian. He instead kept the focus on the “Yemen problem.”

“As far as the drones issue is concerned, it had to do with oil, but I look at it more as a question of security and stability, rather than oil,” Rouhani said.

The Iranian leader said that once stability and peace returns to Yemen, then naturally, “the oil that seems to be of so much concern for everyone will also be produced and exported in security and stability.”

Russian President Vladimir Putin also responded saying the issue of the attack was not discussed during the summit.

“You know what the situation of Russia is, we are determined to avoid a serious humanitarian catastrophe,” Putin said. “We believe that the best way of solving this crisis is to get an agreement between all the parties that are involved in that crisis.”

Over the next few days Saudi Arabia’s Crown Prince Mohammed Bin Salman and his father, King Salman, face the biggest decision of their lives at they respond to the attacks on Saudi oil facilities.

Get it wrong and the region could burn. Get it right and the desert Kingdom could prosper and reform as the ambitious Crown Prince plans.

The dilemma is to strike a balance between punishment and persuasion: To go for Iran’s jugular and unleash withering rounds of strikes on Iranian targets inside Iran or hold back, take the moral high ground, prove your case and win international backing for what ever course of action you take.

But here’s trouble for MBS and his father: In this region, if you play cautious and swallow your pride today, you could deal with it for the rest of your life.

It is a test that the Crown Prince cannot choke: If he does, his dreams of reform will turn to dust.

A little about the company: Aramco, the oil company that was the target of this attack, is the cash cow he needs to milk to turn the country’s economy away from hydrocarbons and keep the next generation of young Saudis in employment. Get the response to the attack wrong and confidence in the company will tumble, taking its value with it.????

Two weeks ago in an apparent bid to speed a long discussed Aramco IPO, he replaced his energy minister with his half brother and switched out the Aramco boss for another close confidant. Whatever reasons he had for shifting gear then will look even starker now.

He must act decisively and without reasonable fear of retaliation. A second wave of similar attacks — something the Houthi rebels have threaten, whomever they are speaking for — would be disastrous for confidence in Aramco and the IPO.

MBS must be strongman, diplomat and peace maker all in one. Failure can not be an option.?

Iranian President Hassan Rouhani did not mention Saturday’s attack on Saudi oil facilities in his opening remarks in a trilateral summit with his Turkish and Russian counterparts in Ankara Monday.

He kept the focus on the crisis in Syria and maintained his position on America’s role in Syria.

“The American president last year spoke of the withdrawal of his country’s troops and forces from the Syrian territories,” Rouhani continued, “but unfortunately those words did not become reality.”?

Rouhani again urged for American presence to be removed from Syria to move forward.

“We must pave the way, leave behind all animosities and adhere to?the?will and the wishes of the Syrian people,” Rouhani said.

The US has told at least one US ally in the Middle East,?that they have intelligence showing that the launch was “likely” coming from staging grounds in Iran, but they have not shared that intelligence yet. “It is one thing to tell us, it is another thing to show us,” said a diplomat from the region.??

A US official separately tells CNN that?the US has assessed that the attack originated from inside Iran. The official spoke on condition of anonymity.

No public evidence has been shared.

What countries in the region decide to do, in reaction to the Saudi oil field attack, largely depends on what the US is willing to do, the source said.?CNN reported earlier that Secretary of State is expected to speak with the UAE Crown Prince on Monday and other nations.??

The Pentagon declined to comment.?The State Department and the White House did not respond to a request for comment.?

The WSJ first reported that the US was telling countries region that the attacks were launched inside Iran.

More context: The attack on oil facilities in Saudi Arabia likely involved cruise missiles and attack drones, a separate US official familiar with the intelligence assessment told CNN earlier today. The official said that the attacks did not originate from Iraq but would not say whether they originated from Iran or Yemen. Iraq’s Prime Minister issued a statement Monday saying that Secretary of State Mike Pompeo had told him that the attacks had not originated from Iraq. The State Department when asked about the call, said “no comment.”

The US maintains an enhanced awareness of the airspace over Iraq given US military operations there as part of the counter-ISIS coalition.?

While the Iran-backed Houthis in Yemen have used attack drones in the past, those attacks have typically been launched against Saudi targets close to the border.

The recent attacks against the Saudi oil facilities would represent a major improvement in the Houthis ability to accurately hit targets at a much greater distance than previously demonstrated.

Kelly Craft, the US Ambassador to the United Nations, addressed the attacks on Saudi oil facilities during an unrelated Security Council meeting on Yemen, calling it “deeply troubling.”

” I’d like to briefly address the deeply troubling attacks on Saudi oil facilities that occurred this past weekend,” Craft said. “The United States condemns these attacks in the strongest possible terms standing firmly with our Saudi friends.”

As of 11 a.m. ET, US oil is trading at more than $60 a barrel in New York on Monday morning. That’s about an 11% change.

What this means for gas this fall: Gasoline futures, meanwhile, were up more than 9%.

“This is a big deal,” said Tom Kloza, chief oil analyst for the Oil Price Information Service, which monitors the price of oil across the United States. “It is the biggest shock to the oil markets since [Hurricane] Katrina. And like Katrina it will likely haunt us for months, at least weeks.”

Kloza said gasoline prices will likely “creep up” this fall, rather than drop steadily, as they historically have done.

Here’s a look at the current oil disruption, and how it compares to others:

Saturday’s attack on two vital oil facilities in eastern Saudi Arabia used Iranian weapons, Saudi-led coalition spokesman Lieutenant Colonel Turki al-Malki said in a news conference today.

“All practical evidence and indicators and the weapons used in both attacks show preliminarily that these are Iranian weapons,” he said, without providing details on the weapons.

He also said the attack was not launched from Yemen. (Remember: Yemen’s Houthi rebels on Saturday claimed responsibility for the attack, saying they conducted the strikes — using 10 drones — in retaliation for Saudi Arabia’s military campaign against the group in Yemen.)

Col. al-Malki said Saudi Arabia is still working on identifying the exact launch location of this attack.

He added that “terror attack” was targeting world oil supplies and the global economy and not Saudi Arabia. The results of the ongoing investigation will be announced soon.

“The kingdom of Saudi Arabia will take all procedures in correspondence with international law,” he said.

What the US is saying: Earlier today, a US official familiar with the intelligence assessment told CNN the recent attack on oil facilities in Saudi Arabia likely involved cruise missiles and attack drones.?The official said that the attacks did not originate from Iraq but would not say whether they originated from Iran or Yemen.

The US maintains an enhanced awareness of the airspace over Iraq given US military operations there as part of the counter-ISIS coalition.?

Top administration officials are meeting again this morning at the White House amid ongoing discussions about the attack on Saudi oil facilities and Iran’s role in the attack, a senior administration official said.

The National Security Council Principals Committee — a gathering of top Cabinet officials with foreign policy purview and the vice president — are meeting this morning at the White House to discuss options for a US response.

Secretary of State Mike Pompeo is expected to make calls to the region on Monday, following Saturday’s attack on Saudi oil facilities, several diplomatic sources tell CNN.

Pompeo is expected to call the UAE Crown Prince today, per a diplomatic source.

The US military posture in the Middle East has not changed following Saturday’s attack on Saudi Arabia’s oil facilities, according to a US defense official.?

But note: Typically following attacks in the region, US forces are put on alert as a standard practice.??

Also the US has an enhanced capability in the region following a plus-up of additional forces that occurred several months ago.?

US stocks opened lower on Monday as investors worried about the economic impact of an attack on Saudi oil production. Disruptions to global oil supply sent crude prices soaring.

About oil prices: US oil is up 9.8% at more than $60 a barrel, while the international oil benchmark Brent is up 10.4% at $66.47 a barrel.

Energy stocks are among the strongest performers thanks to the rising oil prices. Chesapeake Energy jumped more than 15%. Exxon Mobil and Chevron were some of the strongest Dow stocks at the open.

Airlines were hit by the same dynamic, as fuel costs will likely rise. Delta, American Airlines and Untied all opened in the red.

Here’s a look at how the attacks have disrupted oil:

CNN’s Nic Robertson is in Riyadh, Saudi Arabia, where officials have not yet “pointed a finger of blame” for the attacks, he said.

Robertson said the kingdom’s newspaper headlines hold a clue into the government’s thinking: The main headlines emphasize that the United?Nations is worried about the escalation?of tensions in the?region, he said.

Watch more:

President Trump implied that Iran may have been involved in the strike on a Saudi Arabian oil facility — but he stopped short of directly blaming the country on Twitter.

Remember: Iran has denied it was involved in the attack. Yemen’s Houthi rebels said they’re responsible for the attacks, but US officials say the more likely culprit is either Iran or Iraq.

Coordinated strikes on key Saudi Arabian oil facilities this weekend knocked out half of the country’s oil capacity.

Here’s what we know so far:

The attack on oil facilities in Saudi Arabia likely involved cruise missiles and attack drones, a US official familiar with the intelligence assessment tells CNN.

The official said that the attacks did not originate from Iraq but would not say whether they originated from Iran or Yemen. Iraq’s Prime Minister issued a statement Monday saying that Secretary of State Mike Pompeo had told him that the attacks had not originated from Iraq.

The US maintains an enhanced awareness of the airspace over Iraq given US military operations there as part of the counter-ISIS coalition.??

While the Iran-backed Houthi rebels in Yemen have used attack drones in the past, those attacks have typically been launched against Saudi targets close to the border.

The recent attacks against the Saudi oil facilities would represent a major improvement in the Houthis’ ability to accurately hit targets at a much greater distance than previously demonstrated.

Kremlin?spokesperson Dmitry Peskov said Monday the US made “hasty conclusions” in blaming Iran for the attacks on oil facilities in Saudi Arabia.

Here’s the tweet Pompeo sent:

Peskov added: “We view the escalation negatively, we urge all countries, within the region or outside the region, not to take any hasty steps or conclusions that can just worsen the ongoing destabilization.”

Peskov declined to answer whether Russia has any plans to increase oil production to compensate for the losses as Saudi Arabia cut capacity following the attacks.?

President Trump’s claim the US is “locked and loaded” may not refer to military action, the vice president’s chief of staff said Monday, calling the term tweeted by Trump “broad.”

Short said he’s “quite confident” that Secretary of State Mike Pompeo will release evidence backing up his claim that Iran was behind the attack on an oil facility in Saudi Arabia.?

“There’s no doubt that Iran has been a malign actor on the stage here and has been supporting the Houthi rebels in Yemen, but I think there’s certainly greater evidence that he’ll be sharing that directly ties these attacks to Iran,” Short said.

On the prospect of a meeting between President Trump and Iran’s Hassan Rouhani, Short said he’s “not aware of any meetings.”?

The President will be meeting with the National Security team again this morning, Short said.?

The Iranian-backed Houthi rebels have doubled down on their threats against Saudi Arabia, saying their strikes can “reach wherever” they want, according to Houthi-run new channel Al Masirah.

The Houthi rebels previously said they had successfully carried out a “large-scale” operation with 10 drones targeting Saudi Aramco oil facilities in Abqaiq and Khurais.

However US Secretary of State, Mike Pompeo, has disputed the Houthi claim, saying that the attack may have originated from southern Iraq.

Analysts have also expressed doubts that the attack could have been launched from Yemen.

A quick re-set. Attacks on major oil plants in Saudi Arabia have shaken up global oil markets and complicated the already strained relations between the kingdom and its regional arch-rival Iran.

CNN’s Tamara Qiblawi has this handy explainer to get you up to speed. Including what Iran has said about US accusations it is behind the attack:

Iran has denied responsibility for the attack. The country’s Foreign Minister Javad Zarif dismissed Pompeo’s accusations as part of a “max deceit” campaign.

In response to the US statements, a senior Revolutionary Guards commander told Iranian semi-offical news agencies that Iran was ready for “full-fledged” war.

“All American bases and their aircraft carriers in a distance of up to 2,000 kilometers around Iran are within the range of our missiles,” the semi-official Tasnim news agency?quoted Commander Amirali Hajizadeh as saying.

Saturday's attack has led to soaring oil prices.

Two Saudi sources familiar with the kingdom’s oil operations tell CNN that restoring oil production to its pre-weekend attack levels “will take weeks, not days.”

The attacks on key oil facilities in Saudi Arabia on Saturday have disrupted about half of the kingdom’s oil capacity, or 5% of the daily global oil supply.

To alleviate the shortage, President Donald Trump said he will authorize the release of oil from strategic reserves.

The fear is the longer the Saudi facilities continue to operate below capacity, the greater the risk of oil prices rising higher.

Top Russian lawmaker, Konstantin Kosachev, says the US has made “unproven allegations” about Iranian involvement in the attacks on two Saudi oil plants at the weekend. Iran has denied responsibility for Saturday’s attack.

Kosachev, who is chair of the international affairs committee in the upper house of the Russian parliament, speculates that the Trump administration wanted to maintain a hard line on Iran following the departure of national security adviser John Bolton.

On Sunday, President Donald Trump tweeted that the US has “reason to believe that we know” who is responsible for the strikes, adding that the country is “locked and loaded depending on verification.”

Some analysis here from CNN correspondents on the ground in Saudi Arabia and Iran:

Saturday’s attacks strike “at the heart of the country’s lifeblood and the basis of its economy,” says CNN’s International Diplomatic Editor, Nic Robertson, from Riyadh.

The 19 strikes at two facilities were the result of “very clear and careful precision and planning,” he adds

Saudi Arabia is now expected to offset the impact of these attacks through their reserve oil capacity (200 million barrels) in Europe, China and Japan.

Meanwhile in Tehran, CNN’s Senior International Correspondent, Nick Paton Walsh, points out that Saudi Arabia haven’t yet come out to blame anyone.

And as for the Houthi rebel’s claim of using drones, he adds: “They’d have to have flown across hundreds of miles of Saudi Arabia through US-supplied air defenses to hit those refineries.”

Even after many months of the US and allies Saudi Arabia, and Iran, “winding each other up,” we’ve seen “nothing on the scale of these attacks,” says Paton Walsh.

China on Monday called for restraint before a conclusive investigation into Saturday’s attack on Saudi oil facilities.

China called on “relevant parties to avoid taking actions that bring about an escalation in regional tensions,” Hua added.

We’re expecting to hear from Saudi Arabia this morning and later from Iranian President Hassan Rouhani:

The attacks in Saudi Arabia targeted two major oil facilities run by state-owned company, Aramco.

One of the sites, Abqaiq, is the company’s largest oil-processing plant and the largest crude oil stabilization plant in the world. The nearby Khurais oilfield was also hit.

There are no plans for a meeting between Iranian President Hassan Rouhani and US President Donald Trump at the sidelines of the United Nations General Assembly next week, Iranian officials said Monday morning.

Although not planned, Mousavi stopped short of ruling out a meeting between the two leaders from ever happening if the US lifted sanctions.

Mousavi again called the US officials blaming Iran for the attack on Saudi oil facilities “unacceptable.”

He also dismissed the allegations as “lies against Iran.”

Scenes like this one in Martinez, California, were common in September 1973.

Three days before Christmas in 1975, President Gerald Ford signed a law creating the United States’ first emergency stash of crude oil. The nation had been traumatized by an?oil embargo?a few years earlier.

At the time, OPEC, the cartel of oil-producing nations, had a stranglehold on the world’s supply of crude. Today the?United States?is one of the world’s largest producers and a major seller, not just a buyer, of oil.

But the United States still has its stash. The Strategic Petroleum Reserve contains?645 million barrels?– the world’s largest backup oil supply.

On Sunday, US President Donald Trump?authorized the use of oil?from the emergency reserve following weekend attacks on Saudi Arabian oil facilities.?

Read more on the strategic reserve, or SPR, here

The attacks on key oil facilities in Saudi Arabia have disrupted about half of the kingdom’s oil capacity, or 5% of the daily global oil supply.

That means?5.7 million barrels a day of crude oil and gas production have been affected, according to Saudi Energy Minister Prince Abdulaziz bin Salman.

Now oil prices are trading at their highest levels since May.

A haze of smoke is seen from the attacked oil plant in Saudi Arabia.

US oil futures were trading at more than $61 a barrel during Asia hours – a spike of nearly 10%. Earlier, the price jumped as much as 15%. Futures of Brent crude, the global benchmark, traded at nearly $68 per barrel, an 11% increase.

Gasoline futures, meanwhile, were up about 9%.

The attack on the world’s?largest oil processing plant?early Saturday morning is a dramatic escalation in the confrontation between Iran and Saudi Arabia –?even if the Iranians didn’t fire the drones?or missiles responsible.

Several projectiles struck the Abqaiq plant, starting a series of fires that quickly took out nearly half Saudi’s oil production – 5% of the global daily output – and sparking fears about the security of the world’s oil supplies.

It’s unclear when Abqaiq, which is operated by Saudi giant Aramco, will be fully operational again.

A satellite image taken Saturday, September 14, 2019, shows thick black smoke rising from the Abqaiq oil processing facility in Saudi Arabia.

Houthi rebels in Yemen claimed the attack, saying that 10 drones had targeted Abqaiq, as well as the Khurais oilfield. But attacks of this scale and accuracy would represent a sudden and remarkable increase in Houthi capabilities, and neither the United States nor Saudi Arabia is buying the claim.

The?United States swiftly discounted the Houthi claim. Late Saturday, Secretary of State Mike Pompeo?tweeted: “Iran has now launched an unprecedented attack on the world’s energy supply.” And he added: “There is no evidence the attacks came from Yemen.”

In response Iranian Foreign Minister Javad Zarif accused Pompeo of engaging in deception. He?wrote on Twitter: “Having failed at ‘max pressure’, @SecPompeo’s turning to ‘max deceit’ US & its clients are stuck in Yemen because of illusion that weapon superiority will lead to military victory. Blaming Iran won’t end disaster.”

The big question now, is where did this attack originate and who was behind it?

Read more of this analysis here.

President Donald Trump on Sunday evening tweeted?that the US has “reason to believe that we know” who is?responsible for an attack on a Saudi Arabian oil field, adding that the country is “locked and loaded depending on verification” following the?crippling strike.

Trump’s tweet, which appeared to raise the specter of a US military response, served to ratchet up tensions in a region already on edge after Saturday’s audacious attack on the Saudi oil field.

Read more here.