Trump views at military options against Iran after the attack on Saudi refineries
Twitter bombs are there!
President Trump suggests on Twitter that the United States is considering military action after this weekend’s attack on the heart of the Saudi oil industry. He awaits further steps in Saudi Arabia. Earlier, Foreign Minister Pompeo tweeted that Iran was carrying out the attack.
The attacks on Saudi oil installations on Saturday led to a sharp rise in oil prices on Monday. The price of Brent oil in Singapore rose by 19 percent to $ 71.95 a barrel. After that the rate fell again.
The attacks were aimed at two important oil installations of the state oil company Saudi Aramco in Khurhais and Abqaiq. On the latter oil field, in the northeast of the country, is the largest oil refinery in the world. As a result of the attacks on Saturday night, the company has almost halved its oil production, with a reduction of 5.7 million barrels per day. That is a 5 percent reduction in world production.
The oil price fell again slightly after President Trump gave permission to use the US strategic reserve “if needed.” That stock was formed after the oil crisis of 1973. “More than enough oil,” he tweeted.
Saudi Arabia oil supply was attacked. There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!
— Donald J. Trump (@realDonaldTrump) September 15, 2019
More clarity required
Saudi Aramco CEO Amin Nasser promised to provide more clarity within 48 hours on how production recovery is progressing. He says the fires are under control. The company does not expect any problems in the short term. The stocks would be sufficient to be able to deliver for weeks. Most Saudi oil goes to Asia, in particular to China.
Europe is a smaller buyer with less than 1 million barrels. The International Energy Agency also said on Sunday that there are more than enough oil reserves to absorb a decline in Saudi production.
Nevertheless, the stock markets in the Middle East were under considerable pressure on Sunday. Investors are nervous about the rising political tensions in the region and the vulnerability of the oil industry to terrorist attacks. The Saudi Tadawul index fell by more than 3 percent in the meantime, but managed to limit the minus at the end to 1.1 percent. According to market researchers, this was due to Saudi state funds, which bought falling shares to prevent a price fall.
If Aramco succeeds in getting production back on track quickly, the effects of the attacks on the oil market and the global economy are expected to be limited. If the repairs take months instead of weeks, and if tensions in the region continue to escalate, analysts do not exclude an oil price of one hundred dollars per barrel.