Oil, Gas, And Fracking News Reads: 22Sept 2019 – Part 2

Written by rjs, MarketWatch 666

Here are some more selected news articles about the oil and gas industry from the week ended 22 September 2019. Go here for Part 1.

This is a feature at Global Economic Intersection every Monday evening.

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Brent crude oil jumps 13% after drone strikes disrupt Saudi crude production – Oil prices jumped more than 10% after a coordinated drone attack hit the heart of Saudi Arabia’s oil industry on Saturday, forcing the kingdom to cut its oil output in half. U.S. West Texas Intermediate crude futures popped $6.4, or 11.67%, to $61.23 per barrel. Brent crude futures soared $7.89, or 13.3% to $68.07. Drone strikes attacked an oil processing facility at Abqaiq and the nearby Khurais oil field on Saturday, knocking out 5.7 million barrels of daily crude production or 50% of the kingdom’s oil output. Saudi Aramco, the national oil company, reportedly aims to restore about a third of its crude output, or 2 million barrels by Monday. “While in the short term the direct physical impact on the market might be limited, this should move the market away from its bearish macroeconomic cycle and raise the risk premium in the market as funds reduce their short positions,” said Chris Midgley, global head of analytics, S&P Global Platts. Sunday evening, President Donald Trump said he was authorizing the release of oil from the Strategic Petroleum Reserve to keep the markets “well-supplied.” Abqaiq is the world’s largest oil processing facility and crude oil stabilization plant with a processing capacity of more than 7 million barrels per day. Khurais is the second largest oil field in the country with a capacity to pump around 1.5 million barrels per day. In August, Saudi Arabia produced 9.85 million barrels per day. Yemen’s Houthi rebels claimed responsibility for the attack, saying it was one of their largest attacks ever inside the kingdom. The Houthis have been behind a series of attacks on Saudi pipelines, tankers and other infrastructure in the past few years. Trump also said there is reason to believe the U.S. knows the culprit and is “locked and loaded,” while waiting to get the verification from the kingdom to proceed. The U.S. has blamed Iran for the drone strikes on those important facilities. Secretary of State Mike Pompeo said in a tweet Saturday Iran has launched an “unprecedented attack on the world’s energy supply.” “If the Iranians have been driven to desperate measures from the loss of crude export revenues, an attack on Saudi capacity seems a likely response,” Jason Gammel, energy analyst at Jefferies, said in a note on Sunday. “The risk of wider conflict in the regions, including a Saudi or US response, will likely raise the political risk premium on crude prices by $5-10/bbl.”

Drone attacks on Saudi plant could hit global oil supplies – Global supplies of oil are likely to suffer a “major jolt” following Saturday’s attack by a swarm of explosive drones on the world’s biggest oil processing plant in Saudia Arabia.Major fires engulfed the Abqaiq processing facility and the Khurais oil field after the attack, for which Houthi rebels in Yemen claimed responsibility. They said they launched 10 drones with “intelligence cooperation from people inside Saudi Arabia”, according to the rebel-run Saba news agency. The rebels’ spokesman Yahya Saree said their operations “will expand and would be more painful as long as the Saudi regime continues its aggression and blockade” onYemen, he said.The fires are now under control at both facilities, Saudi state media said. Saudi Arabia’s oil fields and pipeline have been the target of rebel attacks over the past year, often using single drones, but analysts said this appeared to be the biggest and most successful to date.The attack has raised tensions in the Gulf. Houthi rebels are assisted by Iran, which has developed sophisticated drones. But US secretary of state Mike Pompeo said last night there was no evidence the strike came from Yemen and accused Iran of launching an “unprecedented attack on the world’s energy supply”. Abqaiq, run by state-owned firm Aramco, is described as the world’s most important processing centre, where crude from several of the country’s largest oil fields is sent before being shipped for export. The attack reduced production by five million barrels a day – nearly half the kingdom’s output and 5% of global production – according to unnamed Saudi oil ministry sources quoted by the Reuters news agency last night. The reduction will go on for at least 48 hours reports said.Robert McNally, of the US-based Rapidan Energy Group, said: “Abqaiq is perhaps the most critical facility in the world for oil supply. Oil prices will jump on this. If disruption to production is prolonged, a Strategic Petrol Reserves release from International Energy Agency members seems both likely and sensible. If anything, the risk of tit-for-tat regional escalation, which pushes oil prices even higher, has just gone up significantly.” The IEA said it was “monitoring the situation closely”. A spokesman added: “We are in contact with Saudi authorities as well as major producer and consumer nations. For now, markets are well supplied.”

Oil rallies 10%; Saudi production may take months to recover -An attack on Saturday set two major Saudi Arabian oil facilities – Abqaiq, a vital crude processing centre, and the Khurais oilfield – ablaze, hitting more than half of the Kingdom’s crude production. Yesterday it emerged that Saudi Arabia is now looking at weeks without full crude and gas production capacity. – The market has yet to receive clarity as to how long it will take the Kingdom to restore output towards the 9.8m barrel a day level of before the attack. – As a result oil rocketed upwards on Monday’s open, with Brent gaining as much as 20 per cent to above $71.00 a barrel – the largest move in percentage terms since Saddam Hussein invaded Kuwait in 1990. Andy Hall – arguably the most successful oil trader of his generation – has given his insights on the weekend’s developments exclusively to the FT. Over a near 45-year oil trading career, Mr Hall gained a reputation for landing on the right side of some of the biggest bets in the market’s history. Here is what he had to say this morning to the FT’s energy editor David Sheppard: Obviously this is a huge development. The loss of production is comparable with that during Saddam’s invasion of Kuwait. An SPR release in the US isn’t going to help offset it much as US crude export capacity is maxed out and opportunities for import substitution are very limited. Ironically, the Saudis have run down their own excess crude/strategic inventories in recent years and these now appear to be at multi-year lows if published data are to be believed. OPEC “spare capacity” consists primarily of Iranian production constrained by US sanctions. It seems unlikely they will be lifted in the current circumstances! A meaningful production response elsewhere would take years even for US shale which has anyway seen it’s production growth start to roll over and would quickly encounter infrastructure and other constraints. This attack underscores the vulnerability of oil production facilities in the Middle East in particular and the world in general. All the tens of billions of dollars the Saudis have spent on weapons could not protect them from a dozen or so low tech drones. Asymmetrical warfare indeed! It would seem the oil market needs to not only price in the current supply loss but also a higher risk premium for the future. On the other hand, the apparent fragility of the global economy will now be further tested by an oil price spike. Buckle up!

Trump authorizes release of oil from strategic petroleum reserve after Saudi attacks – President Donald Trump said Sunday he has authorized the release of oil from the U.S. strategic petroleum reserve after attacks on key production facilities in Saudi Arabia cut the kingdom’s crude production by half.Trump said oil would be released if needed to keep the market well supplied. The president also said that he has informed the appropriate agencies to expedite the approval of oil pipelines still in the permitting process in Texas and other states.Saudi Arabia’s national oil company, Aramco, was forced to cut its production by 5.7 million barrels per day or about 50% after a series of drone strikes hit the heart of the kingdom’s oil production. The world’s largest oil processing facility and Saudi’s second-largest oil field were hit in the attacks.In August, Saudi Arabia produced 9.85 million barrels per day, according to the latest figures from the U.S. Energy Information Administration. Four million barrels per day of Saudi oil exports go to Asia, while the U.S. imports about 600,000 barrels. The biggest importers in Asia are China at 1.3 million barrels and Japan at 1.2 million barrels. The Saudi government has not yet given an official timeline for when production will return to normal. According to The Wall Street Journal, Aramco expects to restore about a third of the lost oil output on Monday. Crude futures jumped sharply at the open Sunday. U.S. West Texas Intermediate popped by $6.45, or 11.6%, to $61.29 per barrel. Brent soared $7.79, or 13% to $68.04.

Why the Saudi oil attack is a ‘big deal’ that could be a ‘game changer’ in stock markets and crude prices – An intensifying Middle East conflict is threatening to throw the world’s energy market into disarray after weekend drone attacks destroyed parts of Saudi Aramco’s Abqaiq plant – one of the world’s largest processors of oil – and a separate nearby oil field. On Saturday, the drone attacks, directed at Saudi Arabian oil facilities that account for nearly 10 million barrels of crude-oil production, resulted in massive plumes of black smoke emanating from the oil field, and a shutdown that could lead to about 50% of its production being at least temporarily thrown offline. Prominent crude-oil strategist Phil Flynn at Price Futures Group told MarketWatch on Sunday that the drone strike was a “big deal” that could result in a major spike in crude-oil prices, because of the potential disruption to global supplies. Saudi Aramco describes Abqaiq as “the largest crude oil stabilization plant in the world,” and the Khurais is considered Saudi Arabia’s second-largest oil field (see map below):Helima Croft, global head of commodity strategy at RBC Capital Markets, said the weekend escalation could prove a “game changer” for the dynamic in the Middle East. “We contend that this morning’s drone attacks on Saudi Arabia’s all important Abqaiq processing facility (which has processing capacity of more than 7 [million barrels a day]) and the 1.5 mb/d Khurais oil field represents a game changer in the escalating Iranian regional standoff,” Croft wrote in a Saturday research report titled: “Saudi Arabia/Iran Crisis Guide Update: This is Your Wake Up Call…” Indeed, West Texas Intermediate crude for October delivery was surging 10.5%, up $5.78, to $60.63 a barrel on Sunday. Brent crude prices for November delivery, the global benchmark, initially shot up 18% as trading began late Sunday, but was most recently up $6.96, or 11.6%, to $67.18 a barrel. S&P Global Platts estimated that Brent oil, the international benchmark, could see a $5 or $10 price surge from its current levels.“While some commentators may call for triple-digit oil prices we would suggest that the sudden change in geopolitical risk warrants not only an elimination of the $5-10/Bbl discount on bearish sentiment, but adds a potential $5-10/Bbl premium to account for now-undeniably high Middle Eastern dangers to supply and the sudden elimination of spare capacity,” the Platts researchers wrote.“As such prices are likely to break out of the current $55-65/Bbl options range, to test the high $70s as currently supported by fundamentals,” the researchers said.Croft said Saturday’s major incident raises the risk of further disruptions to Middle East output that likely elevates the risk of oil prices vaulting higher (see map below via RBC Capital Markets showing recent incidents):

Saudi Arabia reportedly aims to restore one-third of lost oil output by Monday – Saudi Aramco is aiming to restore by Monday about a third of its crude output that was disrupted after drone attacks on two key oil facilities, The Wall Street Journal reported Sunday, citing Saudi officials familiar with the matter.The drone strikes on facilities in Abqaiq and Khurais eliminated 5.7 million barrels of production over the weekend. Officials believe that they can restore 2 million barrels by the end of the day Monday, contrary to earlier claims that full production would resume early this week.Aramco, the national oil company, has determined that its facilities were hit by missiles, people familiar with the matter told The Wall Street Journal. A U.S. government assessment determined that up to 15 structures at Abqaiq were damaged. Saudi Aramco has 35-40 days of supply to meet contractual obligations, a source close to the matter told CNBC. Experts said that the strikes could cause oil prices to rise up to $10 per barrel, which could cause as much as a 25 cent per gallon rise in gasoline prices. But the impact could be smaller depending on how quickly officials are able to restart oil production,

Satellite Images Reveal It Could Take “Months” to Fix Saudi Oil Facility – Upon the US release of declassified satellite images showing precision strikes on critical spheroids at the world’s largest oil processing facility at Abqaiq one market analyst alarmingly writes, “We think this is a months fix, not days/weeks. Oil going up even higher.” This after reports just before the satellite photos were released commonly said a minimum of “weeks” would pass before full Saudi Aramco production capacity comes back online. They appear to show approximately 17 points of impact on key infrastructure at the site after Yemeni Houthis claimed a successful drone strike of up to ten unmanned aerial vehicles with explosives. However, US and Saudi officials, still amid an ongoing investigation, have told reporters they are “certain” the attack actually originated from Iraq, especially as the debris and precision targeting show a level of “sophistication” which would link it to Iran’s elite IRGC. Dan Tsubouchi, chief market strategist at Calgary-based SAF Group, is predicting a fix that will take months based on the extent of the damage revealed in the new images, driving up oil to prices beyond the initial possibly short-sighted predictions this weekend. According to Fox News: The Washington-based Center for Strategic and International Studies in August had identified that region as the plant’s stabilization area. That zone included “storage tanks and processing and compressor trains – which greatly increases the likelihood of a strike successfully disrupting or destroying its operations,” the center wrote at the time. Neither Riyadh officials nor the state-run oil giant Saudi Aramco have yet to confirm the extent of the damage, but have only made assurances they will tap its global reserves network. 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 attacks on Saudi oil supply effectively wipe out the world’s spare capacity, S&P Platts says – The attacks on critical oil production facilities in Saudi Arabia over the weekend will effectively wipe out the world’s spare oil capacity, an expert from S&P Global Platts said on Monday.An oil processing facility at Abqaiq and the nearby Khurais oil field were attacked on Saturday, knocking out 5.7 million barrels of daily crude production – or 50% of the kingdom’s oil output. That’s more than 5% of global daily oil production.The country’s national oil company, Saudi Aramco, has 35 to 40 days of supply to meet contractual obligations, according to a source close to the matter. Saudi Aramco reportedly aims to restore about a third of its output, or two million barrels, by Monday.“This heightens the risk premium, it puts a lot of pressure on the supply side,” said Sarah Cottle, global head of market insight at S&P Global Platts.“This incident effectively eliminates the world’s spare capacity,” Cottle told CNBC’s “Squawk Box” on Monday, though she added the longer-term outlook is bullish due to the immediate need to draw down on crude stockpiles.Brent crude futures, the international benchmark, rose as much as 19.5% to $71.95 per barrel. By 0940 GMT, the contract was at $65.77, up $5.55 or 8.4%.U.S. West Texas Intermediate (WTI) futures climbed as much as 15.5% to $63.34. The contract was later at $59.54, up $4.69 or 7.88%. Cottle’s view was also borne out by energy consultancy Wood Mackenzie. “This attack has material implications for the oil market, as a loss of 5 million barrels per day of supplies from Saudi Arabia cannot be met for long by existing inventories and the limited spare capacity of the other OPEC+ group members,” wrote Alan Gelder, vice president for refining, chemicals and oil markets at Wood Mackenzie.

Saudi Arabia says weapons used to attack its oil facilities were Iranian – Yemen’s Houthi rebels have threatened additional attacks on Saudi oil installations just days after claiming a crippling assault on facilities in the desert kingdom, the group’s al-Masirah TV reported Monday.The new threat came as U.S. officials were pointing fingers at Iran and its other proxies around the region and President Trump said the United States was “locked and loaded” and ready to respond.A Saudi military spokesman said Monday that a preliminary investigation found that the weapons used against the facilities were Iranian.In a televised briefing, Col. Turki al-Malki, a spokesman for a Saudi-led coalition in Yemen, also said the attacks did not originate in Yemen and that investigations were underway to determine the launch location. Iran has denied any involvement. China and European countries have warned against hastily assigning blame. The Iran-backed rebels warned foreigners to leave the area of Saturday’s attacks, which targeted installations belonging to the state-owned oil company, Aramco. The facilities could be attacked again at “any moment,” a Houthi military spokesman said.“We assure the Saudi regime that our long hand can reach wherever we want, and whenever we want,” spokesman Yahya Saree said in a statement, adding that drones modified with jet engines were used in the operation Saturday.The Houthis, who seized Yemen’s capital from the internationally recognized government in 2014, have been fighting a devastating war against a Saudi-led coalition in Yemen and, according to U.S. and Saudi officials, have received military and logistics support from Iran. U.S. officials, including Secretary of State Mike Pompeo, have blamed Iran directly for the attacks, saying that the assault did not come from Yemen. Pompeo did not offer evidence for the claim, which he tweeted on Saturday.The Houthis also have not provided any proof to support their assertion that they carried out the strikes on the Saudi oil installations, using what they said was a fleet of 10 drones.“We don’t need to provide evidence,” Mohammed Albukhaiti, another Houthi spokesman, said in a phone interview Sunday. U.S. allies Britain and Germany condemned the attacks Monday but refrained from assigning blame. “In terms of who is responsible, the picture is not entirely clear,” British Foreign Secretary Dominic Raab said, according to Reuters. “I want to have a very clear picture, which we will be having shortly. German Foreign Minister Heiko Maas told a news conference that Germany was working with its partners to find out who carried out the attacks, while in Beijing, China’s Foreign Ministry also warned against naming a culprit “without conclusive facts.”

We’re Ready For “Full-Fledged” War: Iran Responds To US Accusation It Launched Saudi Oil Attack – After the United States was quick to point the finger at Iran for the early Saturday explosions that rocked Abqaiq facility and the Khurais field – forcing production to be shut and with it 5.7 million barrels a day of oil production lost – Iran has warned it stands ready for a “full-fledged” war.Iranian foreign ministry spokesman Abbas Mousavi slammed Washington for a “maximum pressure” strategy that has turned to “maximum lies,” saying that because of the former’s “failure [the US] is leaning toward maximum lies”. FM Javad Zarif also said these were a continuation of efforts to pressure and shame into compliance under US hegemony. Iran denied the accusations, which followed photos circulating online which appeared to show cruise missile debris scattered in the Saudi desert outside the incapacitated oil facilities. Yemen’s Houthi forces had claimed responsibility, saying it deployed ten drones in the successful targeting of the facilities. And separately an IRGC commander is reported to have reaffirmed that American military bases and aircraft carriers are crucially up to 2,000km around Iran and thus “within range” of Iranian missiles.The senior commander, Amirali Hajizadeh, said his country stands ready for a “full-fledged” war but he stopped short of directly mentioning the attacks. As quoted in regional and state media:On Sunday, the commander of Iran’s Revolutionary Guards Aerospace Force, Amir Ali Hajizadeh, was quoted by the semi-official Tasnim news agency as saying: “Everybody should know that 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,” according to Reuters. “Iran has always been ready for a ‘full-fledged’ war,” Hajizadeh added, without directly mentioning the attacks in Saudi Arabia.

Brent crude oil spikes the most in history after Saudi attacks, last up 13% – Oil prices soared after a coordinated attack hit the heart of Saudi Arabia’s oil industry on Saturday, forcing the kingdom to cut its oil output in half. Brent crude futures, the international benchmark, rose as much as 19.5% to $71.95 per barrel at the open, the biggest intraday jump on record. By early afternoon, the contract was at $68.45, up $8.23 or 13.67%.U.S. West Texas Intermediate futures climbed as much as 15.5% to $63.34. The contract was later at $62.32, up $7.47 or 13.6%.An oil processing facility at Abqaiq and the nearby Khurais oil field was attacked on Saturday, knocking out 5.7 million barrels of daily crude production or 50% of the kingdom’s oil output. Saudi Aramco, the national oil company, reportedly aims to restore about a third of its crude output, or 2 million barrels by Monday. However, Bloomberg News reported it could take weeks before Aramco restores the majority of its output at Abqaiq.”While in the short term the direct physical impact on the market might be limited, this should move the market away from its bearish macroeconomic cycle and raise the risk premium in the market as funds reduce their short positions,” said Chris Midgley, global head of analytics, S&P Global Platts. Oil prices came off their highs after President Donald Trump said he was authorizing the release of oil from the Strategic Petroleum Reserve to keep the markets “well-supplied.” Abqaiq is the world’s largest oil processing facility and crude oil stabilization plant with a processing capacity of more than 7 million barrels per day. Khurais is the second largest oil field in the country with a capacity to pump around 1.5 million barrels per day. In August, Saudi Arabia produced 9.85 million barrels per day. Yemen’s Houthi rebels claimed responsibility for the attack, saying it was one of their largest attacks ever inside the kingdom. The Houthis have been behind a series of attacks on Saudi pipelines, tankers and other infrastructure in the past few years.

Oil jumps nearly 15% in record trading after attack on Saudi facilities – (Reuters) – Oil ended nearly 15% higher on Monday, with Brent logging its biggest jump in over 30 years amid record trading volumes, after an attack on Saudi Arabian crude facilities cut the kingdom’s production in half and fanned fears of retaliation in the Middle East. The attack heightened uncertainty in a market that had become relatively subdued in recent months and now faces the loss of crude from Saudi Arabia, traditionally the world’s supplier of last resort. A gauge of oil-market volatility hit its highest level since December of last year, and trading activity showed investors expect higher prices in coming months. Brent crude, the international benchmark, settled at $69.02 a barrel, rising $8.80, or 14.6%, its biggest one-day percentage gain since at least 1988. Brent futures saw more than 2 million contracts traded, an all-time daily volume record, Intercontinental Exchange spokeswoman Rebecca Mitchell said. U.S. West Texas Intermediate (WTI) futures ended at $62.90 a barrel, soaring $8.05, or 14.7% – the biggest one-day percentage gain since December 2008. “The attack on Saudi oil infrastructure came as a shock and a surprise,” said Tony Headrick, an energy market analyst at St. Paul, Minnesota, commodity brokerage CHS Hedging LLC. “I think the tables abruptly shifted in the way of the supply outlook and caught many who were short off-guard.” Saudi Arabia is the world’s biggest oil exporter and, with its comparatively large spare capacity, has been the supplier of last resort for decades. The weekend attack on state-owned producer Saudi Aramco’s crude-processing facilities at Abqaiq and Khurais cut output by 5.7 million barrels per day and threw into question its ability to maintain oil exports. The company has not given a specific timeline for the resumption of full output. Two sources briefed on Aramco’s operations said a full return to normal production “may take months.” “I don’t think there really is enough to offset what is going to be offline here for a period of time, and you don’t even know the quantity of time,” U.S. intelligence officials said Monday that evidence pointed to Iran being behind the attack, raising the specter of a response that could further unsettle world markets and global supply. President Donald Trump said he was in “no rush” to respond, however, as he awaited more details. That marked a shift in tone from a tweet sent by Trump on Sunday, when he said the United States was “locked and loaded” and ready to respond..

Attack on Saudi Abqaiq finds the oil market’s Achilles heel- Kemp (Reuters) – Oil security experts have worried for decades about the vulnerability of Saudi Arabia’s Abqaiq processing complex to an attack by militants, foreign special forces or missile strikes. Oilfields make a difficult target because of the dispersed nature of the wells and associated infrastructure, but processing facilities and export terminals are concentrated and therefore more vulnerable. Abqaiq processes about half of all crude produced in the kingdom, including output from the supergiant fields of Ghawar (3.8 million barrels per day) and Shaybah (1.0 million bpd). Abqaiq is a single point of failure that could remove millions of barrels per day from the global oil market for an extended period if damaged badly enough. It has long been identified as the top security risk worldwide. For that reason, Abqaiq has been one of the most heavily protected places on the planet. Saudi Arabia has armed guards to protect the perimeter, and security forces actively target threats from foreign militants and domestic dissidents. In addition, the United States maintains a large Central Intelligence Agency station in the country and has military personnel stationed in the Eastern Province to help protect against external threats. Abqaiq has always been a much greater source of risk for the oil market than the Strait of Hormuz. But until the weekend attack, it was assumed to be a high-consequence, low-probability danger so was largely discounted. Saudi security forces foiled an apparent suicide car bomb attack on the facility in 2006, when guards opened fire on at least two cars carrying explosives as they tried to ram the gates, according to contemporary reports. As a result, security experts concluded Abqaiq was relatively safe in most circumstances short of an open military conflict with Iran; Saturday’s attack has shown that assessment was wrong. The Abqaiq attack will therefore force a major re-evaluation of security risks in the oil market, where it has highlighted global vulnerability to a single point of failure.

Rick Perry says it’s premature to say whether Strategic Petroleum Reserve is needed – Secretary of Energy Rick Perry told CNBC on Monday that it’s too soon to say whether the U.S. will need to use its emergency crude reserves to offset the surge in oil prices stemming from drone strikes on Saudi Arabia’s oil processing plants over the weekend.“I think we’re yet a little premature in making in comments on … whether or not the SPR’s going to be needed until we get a real handle on the length of time that this facility is going to be down,” Perry told “Squawk on the Street.”The attack hit an oil processing facility at Abqaiq and the nearby Khurais oil field, knocking out production of 5.7 million barrels a day, or half of Abqaiq’s daily volume. President Donald Trump in response authorized the release of oil from the Strategic Petroleum Reserve, the nation’s emergency oil reserve, should it be needed to stabilize crude prices.“I think the Saudis are already saying that they’re going to be able to get a third of this production back before the closing of business today,” Perry said. “There’s going to be a spike in this, but again, I want to be really clear that the market out there has a fairly substantial amount of oil available,” referring to globe reserves.Brent crude futures, the international benchmark, rose as much as 19.5% to $71.95 per barrel at the open, the biggest intraday jump on record.“This disrupted without a doubt and put people on notice that you’ve got some bad actors in the world and you need to be addressing the security side,” the secretary said.Yemen’s Houthi rebels claimed responsibility for the attack, saying it was one of their largest attacks ever inside the kingdom. The U.S., however, has blamed Iran for the drone strikes on the facilities.

Hedge funds turned bullish on oil before Saudi attacks (Reuters) – Before the attacks on Saudi Arabia’s oil installations on Sept. 14, hedge fund managers had started to become more bullish, or at least less bearish, about the prospects for oil prices amid hope for a trade truce between the United States and China. Hedge funds and other money managers purchased the equivalent of 122 million barrels of crude and fuels in the six most important futures and options contracts in the week to Sept. 10, the largest one-week increase for more than a year. The jump came after five months in which fund managers had been mostly sold oil, suggesting the market had reached a turning point even before the attack on Abqaiq. Portfolio managers were buyers of Brent (+52 million barrels), NYMEX and ICE WTI (+30 million), U.S. gasoline (+9 million), U.S. diesel (+9 million) and European gasoil (+21 million). Position changes were split fairly evenly between short-covering and the establishment of new long positions, according to an analysis of records published by regulators and exchanges. Fund managers cut short positions by 54 million barrels while boosting longs by 67 million (https://tmsnrt.rs/31Ae3Ba). The ratio of hedge funds’ long to short positions, probably the most useful way of measuring their expectation of future price changes, jumped to 4.00:1 from 2.91:1 the previous week. Most of the bullishness seems to have come from increased hopes the United States and China would reach at least a temporary truce in their worsening trade conflict. Both governments announced confidence-building measures, including the postponement of some scheduled tariff increases, ahead of a planned resumption of trade talks in October.

China Slams Premature Blaming For Aramco Attack As US Hawks Argue Military Action – After Trump’s Sunday “Locked and Loaded” comment in response to the early Saturday precision strikes on Saudi Aramco facilities from an as yet unconfirmed entity (the Houthis claimed immediate responsibility, with the US-Saudi coalition now blaming Iran), China on Monday slammed Washington finger-pointing as premature and irresponsible, though without directly mentioning the US.However, it was clear to where the words were directed given on Monday Washington’s “Iran did it” narrative has advanced with rapid pace by the hour. Chinese Foreign Ministry spokeswoman Hua Chunying urged all parties to “restrain themselves” and called on western leaders eager to cast quick blame to wait for a “conclusive investigation”. Hua said in the Monday press briefing from Beijing: “Pondering who is to blame in the absence of a conclusive investigation, I think, is in itself not very responsible. China’s position is that we oppose any moves that expand or intensify conflict,” according to Reuters.“We call on relevant parties avoid taking actions that bring about an escalation in regional tensions. We hope all sides can restrain themselves and can jointly safeguard the peace and stability of the Middle East.”The statement asserted that needless escalation in the region must be avoided, also after the attacks on the key Aramco facilities sent global oil prices soaring. Iran, for its part denied having any involvement as did Iraq or its pro-Iran paramilitary forces. An Iranian foreign ministry statement issued earlier on Sunday slammed US charges as “useless accusations” which are “meaningless and not comprehensible and are pointless

Why Would Iran Attack the Saudis NOW? – U.S. officials claim that the attacks against Saudi oil facilities were launched from Iranian soil. Are they right?We have no idea at this point, as the U.S. government hasn’t released any evidence.But given that the U.S. and 23 other countries have ADMITTED to carrying out false flag attacks before – including – it’s worth asking whether Iran or another country had more to gain from this attack …Indeed, U.S. officials have admitted to twice carrying out false flag attacks intended to frame Iran and justify regime change:

• (1) The CIA admits that it hired Iranians in the 1950′s to pose as Communists and stage bombings in Iran in order to turn the country against its democratically-elected prime minister.
• (2) CIA agents and documents admit that the agency gave Iran plans for building nuclear weapons … so it could frame Iran for trying to build the bomb.

And neocons have been planning on further regime change in Iran for more than 25 years.So it’s worth questioning this, at least in the absence of real evidence. This is especially true because – until a couple of days ago – it seemed like the U.S. and Iran were moving towards diplomatic talks.And Trump just fired the head “bomb Iran” cheerleader, John Bolton. So the odds of a peaceful solution to tensions with Iran seemed higher than they had been in yearsSo why would the Iranians “torpedo” the momentum towards diplomacy, and hand the U.S. a casus bellion a silver platter? Why now?

Costly Saudi defenses prove no match for drones, cruise missiles (Reuters) – Billions of dollars spent by Saudi Arabia on cutting edge Western military hardware mainly designed to deter high altitude attacks has proved no match for low-cost drones and cruise missiles used in a strike that crippled its giant oil industry. Saturday’s assault on Saudi oil facilities that halved production has exposed how ill-prepared the Gulf state is to defend itself despite repeated attacks on vital assets during its four-and-a-half year foray into the war in neighboring Yemen. Saudi Arabia and the United States have said they believe Iran, the kingdom’s arch-enemy, was probably behind the strike. On Tuesday, a U.S. official said Washington believed the attack originated in southwestern Iran. Three U.S. officials said it involved both cruise missiles and drones. Tehran has denied such accusations, saying that Yemenis opposing Saudi-led forces carried it out. Yemen’s Iran-aligned Houthi movement is alone in claiming responsibility. Iran maintains the largest ballistic and cruise missile capabilities in the Middle East that could overwhelm virtually any Saudi missile defense system, according to think-tank CSIS, given the geographic proximity of Tehran and its regional proxy forces. But even more limited strikes have proved too much for Saudi Arabia, including recent ones by Houthis who claimed successful attacks on a civilian airport, oil pumping stations and the Shaybah oilfield. “We are open. Any real facility has no real coverage,” a Saudi security source said. The Sept. 14 assault on two plants belonging to state oil giant Saudi Aramco was the worst on regional oil facilities since Saddam Hussein torched Kuwait’s oil wells during the 1990-91 Gulf crisis. The company said on Tuesday that production would be back to normal quicker than initially feared, but the attack nonetheless shocked oil markets. Riyadh said preliminary results indicated the weapons used were Iranian but the launch location was still undetermined. Authorities initially specified drones, but three U.S. officials said the use of cruise missiles and drones indicated a higher degree of complexity and sophistication than initially thought.

A View from the Brink –Kunstler — Welcome to the world where things don’t add up. For instance, some people did some things to the Saudi Arabian oil refinery at Abqaiq over the weekend. Like, sent over a salvo of cruise missiles and armed drone aircraft to blow it up. They did a pretty good job of disabling the works. It is Saudi Arabia’s largest oil processing facility, and for now, perhaps months, a fair amount of the world’s oil supply will be cut off. President Trump said “[we] 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!” Exclamation mark his. How many times the past few years has our government declared that “we have the finest intelligence services in the world.” Very well, then, why are we waiting for the Kingdom of Saudi Arabia to tell us who fired all that stuff into Abqaiq? Whoever did it, it was unquestionably an act of war. And, of course, what are we going to do about it? (And what will some people do about it?) Let’s face it: the USA has had a hard-on for Iran for forty years, ever since they overthrew their shah, invaded the US embassy in Tehran, and took fifty-two American diplomats and staff hostage for 444 days. On the other hand, the Arabians and Iranians have had a mutual hard-on for centuries, long before the Saud family was in charge of things, and back when Iran was known as Persia, a land of genies, fragrant spices, and a glorious antiquity (while Arabia was a wasteland of sand populated by nomads and their camels). The beef was formerly just about which brand of Islam would prevail, Sunni or Shia. Lately (the past fifty years) it has been more about the politics of oil and hegemony over the Middle East. Since the US invaded Iraq and busted up the joint, the threat has existed that Iran would take over Iraq, with its majority Shia population, especially the oil-rich Basra region at the head of the Persian Gulf. The presence of Israel greatly complicates things, since Iran has a hard-on for that nation, too, and for Jews especially, often expressed in the most belligerent and opprobrious terms, such as “wiping Israel off the map.” No ambiguity there. The catch being that Israel has the capability of turning Iran into an ashtray. The world has been waiting for a major war in the Middle east for decades, and it might have one by close of business today. Or perhaps some people will do nothing. The Iran-backed Houthi rebels of Yemen supposedly claimed responsibility for the attack. That’s rich. As if that rag-tag outfit has a whole bunch of million-dollar missiles and the knowledge and capacity to launch them successfully, not to mention the satellite guidance mojo. A correspondent suggests that the missiles were fired from a pro-Iranian military base in Iraq, with the Houthis brought in on flying carpets to push the launch buttons.

The Strike On Saudi Oil Facilities – Barkley Rosser – This is going to be a tentative post because there is much that remains unclear. What I am going to do is to make it clear that stories that are being told by US authorities and largely repeated by the MSM with little critical commentary is highly questionable. As it is, it looks like the economic impact of the knocking out of about 60 percent of Saudi oil processing capacity by an attack by 20 drones will not amount to too much. The Saudis have now announced that they should have 70 percent of their damaged production capacity back in operation within a week or two. The matter that remains very much in the air, with a threat of war breaking out worse than it is already happening, involves the source of the attack on the facilities in Khurais and Abqaiq. SecState Pompeo outright said the attack came from Iran. Supposedly US intelligence agencies are supporting this, although there seem to be doubts. Buried deep in the press reports are caveats suggesting that maybe not quite all the attacks came from there. Of course, it is essentially impossible to evaluate these claims as we know these agencies have their secret methods and sources they are not leaking. But then we see both the Saudis and President Trump holding back from fully going along with this report. So why might this be wrong? Well, at least one alternative version appears to have been decisively repudiated. That is that the attack came from Shia militias in Iraq. This theory was put forth by Bibi Netanyahu of Israel, perhaps as a desperate part of his reelection campaign, with it looking like he has not done well in that election, although the full outcome is still not known. But this apparently blatantly ridiculous report may be the beginning of the end of people taking publicly announced Israeli intelligence reports as things to be taken seriously. However, the more serious alternative to Iran as a source is the Yemeni Houthis. Almost certainly the drones were from Iran, although even that is not definitely certain. In any case several statements have come supposedly from US intel agencies that the Yemeni Houthis could not have done this, even though they themselves have been loudly claiming that they did it, while the Iranians are loudly denying that they did it. Supposedly this all distraction from the role of the Iranians. But Juan Cole has pointed out things that the media are simply not reporting things that suggest that indeed the Yemeni Houthis appear to have the capability. In particular in May the Houthis launched a drone attack on an oil pumping station at al-Duadimi, well over 800 miles from Sana’a. The sites struck in this attack are only another 100 miles further, and the Shehad 129 Iranian drone supposedly can travel a full 1100 miles. Why are we seeing no reports of this in the media?

Blain: “Someone Should Ask Why Saudi Is Doing So Badly In Conflict With The Unsophisticated Houthi Tribesmen” – As Washington scrambles for face-saving evidence to pin on Iran, there are some pretty fundamental questions to be asked about the weekend precision strikes on Saudi’s oil facilities.There are the obvious market effects to consider: While production might be swiftly repaired and resumed – the price spike is going to change behaviours dramatically in terms of energy trading and hedging. While there is capacity to cover lost production short-term, raising the threat level will change price expectations long-term. How quickly can the globe shift supply from the Middle East if this brews up into a full regional conflict? How could China scrabbling for new oil sources impact prices? The attack begs questions about oil inflation, global resilience to an oil shock, and has every analyst scribbling about his compares to previous oil shocks. And an oil shock in the week the Fed meets to discuss another US rate cut? Interesting….The success of the strike, (taking out the production facilities has been tried before, but never with such stunning success), cast doubts on both US and Saudi intelligence and competence. In terms of timing the attackers chose their moment spectacularly well.It was a precision attack on Saudi’s regional credibility – and by extension on Trump and the US. The competence of Trump’s buddy, de-facto ruler Crown Prince MBS is on the line. Saudi is the third highest defence spending nation at $69 bln, and ranks highest global spender in terms of 8.8% of GDP! So why is Saudi doing so badly in the conflict with supposedly unsophisticated Houthi tribesmen? Someone should probably be asking questions about what the recently arrived US forces sent by Trump and their Patriot missiles were up to. Clobbering Aramco just days after Crown Prince MBS effectively sacked the respected oil industry veteran Khalid al-Falih and replaced him with a political ally and head of the Saudi SWF, looks almost prescient. Without the proceeds of the Aramco sale – Saudi is in trouble trying to balance reform, growth and sentiment. It’s a gift to any internal Saudi dissent. This is a Morning Porridge I wrote earlier this year on Saudi and Aramco – bit out of date, but sums up the issues.

The Strike On Saudi Oil Facilities Was Unprecedented And It Underscores Far Greater Issues -The post-strike satellite images provided by the U.S. Government clearly show just how precise the weapons used were, punching near-identical placed holes into major components of Saudi Arabia’s oil apparatus. In other words, this is not unguided artillery here, it can maneuver dynamically to approach a target from a direction that its targeters find most advantageous – either for kinetic effects, survivability, or deniability reasons. With that in mind, the attacks could have come from any vector-based on impact information alone – Iraq, Yemen, Iran, or even a boat in the Persian Gulf. The weapons could even have been launched from within a nearby friendly country by clandestine forces, although that is quite unlikely. And who is to say they all came from just one locale? Multiple types of weapons – cruise missiles, suicide drones, or even larger low observable drones capable of dropping their own weapons – could have been launched from completely different locations in a coordinated, multi-layer assault. Regardless of their origin, when I first saw the damage, I felt like drones were potentially part of the attack, but likely not the only weapons employed. In fact, it looked a lot like a cruise missile strike with some of those weapons being equipped with shaped charges for penetrating fortified structures and others being equipped with general high explosives warheads for greater effects against unfortified structures. Whoever planned the strike had a very good understanding of the facilities targeted and what their components do, as well as their vulnerabilities and propensity for secondary effects. In other words, it wasn’t just showering a target area with explosive-laden drones or even picking some important-looking structures targeting those. The targeting was systemic in nature and high in quality. That brings us to my next point, one you probably also thought to yourself when this happened – this was an unprecedented attack. The Department of Defense was ridiculously asleep at the wheel regarding this threat and is now scrambling to play catchup. Anyone who says differently is straight-up lying. It’s well established what non-state actors can already do with relatively low-end unmanned aircraft technology – Houthi rebels alone have been using suicide drones for two and a half years – just imagine what a peer state will be able to do in the very near future. Instead of a mass of individual suicide drones layered in with other weapons, like cruise missiles, attacking a target simultaneously, imagine a swarm that is fully networked and works cooperatively to best achieve their mission goals, including jamming or killingair defenses in order for the swarm to make it to its final destination. America’s adversaries are all too aware of this game-changing potential and the lack of defenses to counter it in any robust manner.

Saudi Oil Attack: What You’re Not Being Told — We must ask ourselves how – while under the watchful eye of the world’s leading military superpower – was it possible for the world’s largest oil processing facility to be targeted so heavily and in such dramatic fashion? As stated by the Council on Foreign Relations (CFR), “protecting Saudi Arabia and other Persian Gulf producers has been a cornerstone of U.S. foreign policy for decades” as “providing security for the oil-rich Persian Gulf region has been a U.S. priority since World War II.”The Brookings Institution further argues that deterring Iran’s ability to encroach on Saudi oil fields is one of the main reasons for a continued American military presence in the region. To that end, the U.S. even provides Saudi terminals with sophisticated U.S.-made Hawk surface-to-air missiles. According to an estimate by Securing America’s Future Energy (SAFE), the U.S. spends approximately $81 billion a year protecting oil supplies around the world. This calculation is allegedly on the conservative side, as it doesn’t include the full costs to “protect” oil fields in Iraq, for example. This time last year, the U.S. president launched one of his infamous Twitter tirades in which he claimed the US was protecting countries in the Middle East all the while those same countries push for “higher and higher oil prices.” It is hard to imagine he could have meant anyone besides Saudi Arabia. Bearing in mind that, not too long ago, the U.S. deployed 500 troops to the Kingdom for the first time since 2003 as a show of strength in Washington’s spat with Iran. With so much support, even if the U.S. and Saudi Arabia were unable to deter or defend from such an attack, surely they would have at least have evidence of how it was perpetrated. And if that evidence does indeed exist, why was it not quickly presented in lieu of crying “Iran” (which is starting to sound a lot like crying “wolf”). A handful of photos and anonymous statements are not going to cut it this time around.

‘Sophisticated actor’ targeted Saudi oil facility, says expert –Bob McNally, founder and president of Rapidan Energy group, and Jason Bordoff, former special assistant to President Obama, join “Squawk on the Street” to discuss the attack on a Saudi Arabian oil facility.

Saudi oil attacks came from southwest Iran, U.S. official says, raising tensions (Reuters) – The United States believes the attacks that crippled Saudi Arabian oil facilities last weekend originated in southwestern Iran, a U.S. official told Reuters, an assessment that further increases tension in the Middle East. Three officials, speaking to Reuters on condition of anonymity, said the attacks involved cruise missiles and drones, indicating that they involved a higher degree of complexity and sophistication than initially thought.The officials did not provide evidence or explain what U.S. intelligence they were using for the evaluations. Such intelligence, if shared publicly, could further pressure Washington, Riyadh and others to respond, perhaps militarily. Saudi state television said the Saudi Defense Ministry will hold a media conference on Wednesday that will show evidence of Iran’s involvement in the Aramco attacks, including the use of Iranian weapons.Iran denies involvement in the strikes. Iran’s allies in Yemen’s civil war, the Houthi movement, claimed responsibility, saying they struck the plants with drones including some powered by jet engines.U.S. President Donald Trump on Monday said it looked as if Iran – which has a long history of friction with neighbor Saudi Arabia – was behind the attacks. But in a sign that U.S. allies remain unconvinced, French Foreign Minister Jean-Yves Le Drian said he was unsure if anyone had any evidence to say whether drones “came from one place or another.”

Is A Full-Blown War In The Persian Gulf Inevitable? – Iran has been able to counter U.S. President Trump’s maximum pressure strategy by taking the challenge to the next level. With a big bang, the global oil market has been forced to rethink the current fundamentals and future prospects, asSaudi Arabia’s most critical infrastructure, the Al Abqaiq gas-oil separation plant (GOSP), was hit by drone strikes over the weekend. After neglecting or outright ignoring increased geopolitical risks and new technological challenges, culprits have hit Abqaiq, which is not only the heart of the Saudi Aramco oil and gas infrastructure, but also the center of the global oil market. Until now, financial analysts have paid little attention to the geopolitical risk premium, and last week’s EIA/EIA and DNV reports continued to focus on the ‘bearish’ demand side of the market. Still, as fundamentals contrast analysis, geopolitical and security facts on the ground could now completely change the constellation. As long as hydrocarbons are the leading source of energy in the world, oil and gas infrastructure will remain a primary target for terrorists, cybercrime and state actors. Hardliners in Iran, Iraq, and Yemen, will be smiling, as the low-key and low-tech attack on Abqaiq has had a devastating result. With one stroke, market optimism about the removal of U.S. Hawk National Security Advisor Bolton and rumors about a Trump – Rouhani summit have evaporated. Despite warnings that the U.S.-Iran crisis is far from over, oil prices fell last week after U.S. President Trump fired Security Advisor John Bolton. Saturday’s attacks will not only disrupt de-escalation efforts but they have also fueled the anti-Iran front in the U.S. and abroad. Tehran backers, most probably IRGC leadership and proxies in Iraq, Yemen, and Lebanon, have been able to shock the oil market and have indirectly supported the Hawks in Washington and the Middle East. The Abqaiq attack, removing 5 million bpd of Saudi’s production, also removed doubts surrounding the so-called “Crying Wolf” approach of Washington and its Arab allies. The OPEC leader and its allies are under threat. U.S. Foreign Secretary Pompeo was quick to point the finger at Iran, but Tehran has not yet been caught red-handed. The reactions of the Arab world are clear, full condemnation and preparation for military actions. At the same time, without the U.S., Egypt or Israel, no unilateral actions against Iran or proxies will be taken. What should be more worrying is that culprits were able, with relatively low technology arms, to bring down a major OPEC producer. Companies and governments should address these new types of threats, as the Abqaiq attack can be repeated without difficulty.

Aramco Forges Ahead With IPO Work After Attacks — It’s still business as usual for the bankers hired to sell a piece of Saudi Aramco in the wake of attacks on its biggest facilities that slashed oil output by half, according to people with knowledge of the matter. For financiers hired to get the deal done, the real difficulty in finding buyers to pay top dollar in the world’s biggest initial public offering will emerge only if there are follow-up bombardments, the people say. Those would heighten the risks that bankers say are just a cost of doing business in the region and that some analysts say are being ignored for the sake of completing this trophy transaction. For now, the energy giant aims to hold analyst presentations as planned and hasn’t signaled any delay to executives in a listing envisioned on the Saudi stock exchange as early as November, the people said, asking not to be identified because the matter is sensitive. Aramco was considering holding presentations the week of Sept. 22, Bloomberg News previously reported. But the magnitude of the attacks, claimed by Yemen’s Iran-backed Houthi rebels, make the chances of the IPO happening in the coming months unlikely, according to one of the people. The extent of any delay would depend on how long Aramco takes to restore its full production, another person said. Aramco lost about 5.7 million barrels per day of output. A spokesman for Saudi Aramco didn’t immediately respond to requests for comment. Saturday’s strikes, just days after Aramco hired banks including Goldman Sachs Group Inc. and Morgan Stanley, dealt a blow to the company that had been speeding up preparations for the IPO. The attacks on the world’s biggest crude-processing facility and the kingdom’s second-biggest oil field also risk reducing valuation of Aramco, which Crown Prince Mohammed bin Salman has put at over $2 trillion, according to analysts. “There’s a 70% plus chance of delay of the Aramco IPO if they want a higher valuation,” said Mohammed Ali Yasin, the chief strategy officer at Al Dhabi Capital in Abu Dhabi. “The cost of risk that investors were factoring in on Aramco prior to this attack completely needs to change going forward.”

Energy Expert Warns Oil Shocks Hit The Economy With Incredible Speed, Usually Within Thirty Days – The lasting damage from the weekend’s attacks on Saudi oil infrastructure is yet to be fully assessed. Having said that, we can make some broad statements about supply outages and economic cycles.Although we tend to forget it, almost all of the major US recessions since 1945 have been triggered by wars in the Middle East involving Persian Gulf countries and oil politics.Specifically:

• The 1956-1957 Suez Crisis led to the closing of the Suez canal and rapidly precipitated a recession in the advanced economies
• The Yom Kippur War of 1973 led to an embargo on oil exports to the US and other western countries, precipitating the first US post-peak oil shock
• The Iran-Iraq War created another price spike, triggering the Second Oil Shock, two back-to-back recessions in the US (1979-1983)
• Price increases associated with Saddam Hussein’s preparations for the First Gulf War tipped in the US into recession in 1991
• The Arab Spring of 2011 created supply shortages which sent oil prices back over $100/barrel, leading to a two year recession in Europe

In recent times, only the 2001 Dot.com bust and the 2008 oil price spike were not associated with supply outages related to a conflict in the Middle East. A conflict-induced recession would not be an exception to the rule, but rather the typical trigger ending a late stage expansion in the west. Oil shocks hit the economy with incredible speed, usually within thirty days. The magnitude necessary to precipitate a price spike and a resulting recession is probably less than a loss of 3 mbpd, 3% of global supply. Over the weekend, Saudi outages totaled 5.7 mbpd. The oil price would have to reach around $110 / barrel to push the world into recession, before taking into consideration the phase of the business cycle. The closest parallel is 1991, when a brief oil price spike pushed an already tottering US economy into recession. The futures curve as of this morning can be seen on the graph below.

The spike in oil prices will have to get a lot worse before it wrecks the economy – Energy prices surged Monday following some stunning developments in the Middle East, but it likely will take quite a bit more before having a broader effect on the economy. West Texas Intermediate crude briefly rose more than 11% to above $60 a barrel following the drone attack on Saudi-held oil interests, but the jump was kept in check through the session amid expectations that in a worst-case scenario, the U.S. would simply open up its strategic reserve to hold back prices. Even if the shock waves continue to reverberate from the conflict – international benchmark Brent crude rose even higher Monday – the long-ranging implications are not expected to be pronounced. The “level to watch” is around $80 a barrel, said Nick Colas, co-founder of DataTrek Research. The current spike, he said, is likely “unsustainable.” “As dramatic as the weekend’s events may be, it’s not like Iran or its surrogates actually took over Saudi oil fields, as was the case in 1990 with Iraq/Kuwait,” Colas said in a his daily note to clients. “Saudi Arabia has every incentive to get production back online, secure its facilities better, and return to full production. And, of course, the US has its Strategic Petroleum Reserve to tap as well.” Even the $80 level might not mean a pronounced broader downturn for the economy. Colas points out that of the recessions the U.S. has seen dating back to the early 1980s, none has come without an oil spike of at least 90%. The Great Recession, for instance, saw a 96% move, while the dot-com bust featured a 141% surge and 1990′s was preceded by a 96% jump.

Oil slips as market assesses fallout from Saudi attack — Oil prices slid on Tuesday, although the market remains on tenterhooks over the threat of a military response to attacks on Saudi Arabian crude oil facilities that halved the kingdom’s output and prompted a price spike not seen in decades. Saturday’s attacks raised the prospect of a major supply shock in a market that in recent months has focused on demand concerns due to the pressure on global growth from an ongoing U.S.-China trade dispute. Saudi Arabia is the world’s top oil exporter and has been the supplier of last resort for decades. Brent crude was down 36 cents, or 0.5%, at $68.66 a barrel at 0930 GMT, and West Texas Intermediate was down 57 cents, or 0.9%, at $62.33 a barrel. Earlier, the crude benchmarks both fell by around 2%. On Monday, the prices surged nearly 20% in intraday trading in response to the attacks, the biggest jump in almost 30 years, before closing nearly 15% higher at four-month highs. Saudi energy minister Prince Abdulaziz bin Salman will hold a news conference at 8.00 pm local time (1700 GMT).State-owned producer Saudi Aramco has not given a specific timeline for the resumption of full output. “All eyes will be on the Saudi news conference,” said Samuel Ciszuk, founding partner at Stockholm-based ELS Analysis. “We need a proper damage assessment, we need to see a recovery plan. Before that, we don’t really know how much oil will be offline for how long and that’s the basic question people having been posing since Saturday.” The attacks on Saudi Aramco’s crude-processing facilities at Abqaiq and Khurais cut production by 5.7 million barrels a day, the largest single supply disruption in half a century, and threw into question its status as supplier of last resort. The fallout in Asia, the largest buyer of Saudi crude, has been varied, with some refineries expected to receive their allocated volumes for October, and other importers being told of delays or being offered alternative grades.

Oil supply fully back by end of Sept, Aramco IPO on track, Saudis say –Saudi oil production will be fully back online by the end of September, the kingdom’s energy minister, Prince Abdulaziz bin Salman, told the media during a news conference in Jeddah on Tuesday, sending oil prices down by more than 6% just a day after their biggest jump in history.The world’s largest crude oil processing facility and the heartbeat of Saudi Arabia’s energy industry was targeted in drone and missile attacks early Saturday morning that knocked out more than half of the OPEC kingpin’s global daily exports.Fifty percent of the crude production cut from the attack has been restored in the past two days, bin Salman said, adding that production capacity would reach 11 million barrels of crude per day (bpd) by the end of September and 12 million bpd by the end of November. The kingdom’s crude exports won’t decrease, the minister said – rather, inventory stocks will be drawn down in order to meet export commitments.“We are in the process to bring back oil refining to full capacity,” bin Salman said. “The company will honor all of its commitments to its customers this month by drawing from its reserves of crude oil and further modified some of its oil until the production capacity of the country is up to 11 million barrels a day by the end of September and up to 12 million barrels in November.”Preparations for Saudi state oil giant Aramco’s highly anticipated initial public offering will also continue apace, Aramco Chairman Yasir al-Rumayyan said, sitting beside the energy minister.“The IPO is a commitment by the shareholder, the government of Saudi Arabia, and we think the IPO will continue as is, we are not going to stop anything,” al-Rumayyan said. “This would make us even be firm when it comes to taking the company public, so I think anytime in the coming 12 months we’ll be ready as per the market opportunity.” The kingdom reportedly plans to list 1% of Aramco on its local stock exchange before the end of this year and another 1% in 2020 as first steps ahead of a public sale of roughly 5% of the company, which is the largest in the world.

Detailed satellite photos show extent of ‘surgical’ attack damage to Saudi Aramco oil facilities – Satellite photos released by the U.S. government and DigitalGlobe reveal the surgical precision with which Saudi Aramco’s oil facilities were struck in attacks early Saturday. The strikes, which unidentified U.S. officials have said involved at least 20 drones and several cruise missiles, forced Saudi Arabia to shut down half its oil production capacity, or 5.7 million barrels per day of crude – 5% of the world’s global daily oil production. The images, first obtained by The Associated Press, show that at least 19 strikes were launched and 17 actually hit targets. 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 attacks were “extremely surgical,” Samir Madani, co-founder of satellite tracking firm TankerTrackers.com, told CNBC on Monday. Analysts have identified at least 17 hits, which targeted 14 storage tanks and three processing trains. “Those punctured tanks – same position on all of them,” Madani said. Photos show hits on several “spheroids” used to process crude oil, which analysts say reveal pinpoint accuracy. The images also reveal fires from blasts elsewhere in the facility. Saudi Arabia’s Abqaiq facility in its eastern province is the world’s largest crude oil stabilization plant, with a processing capacity of more than 7 million bpd. Its Khurais oilfield, which was also hit, is the kingdom’s second-largest with a capacity to pump around 1.5 million bpd. Yemen’s Houthi rebels claimed responsibility the attack, but U.S. Secretary of State Mike Pompeo has labeled Iran as the culprit, a claim Tehran denies as “unacceptable” and “pointless.” The Saudi-led coalition fighting the Houthis announced Monday that preliminary results of an investigation indicated that the weapons used are Iranian and were not launched from Yemen. Madani’s analysis found that the strikes came from a west-north-west direction, which is consistent with that of U.S. officials. Houthi-controlled territory in Yemen, by contrast, is located to the southwest of the facilities. Coalition spokesman Col. Turki al-Maliki said investigators were still trying to determine the launch location. “It’s a bit alarming that these folks got through. We looked at those photos that were released by the Trump administration – they were exquisitely precise, they knew exactly what to hit, they hit it perfectly,”

Who Can Boost Supply to Offset Saudi Attack? – Here is a list of countries that could boost crude production to offset losses from Saudi Arabia in the event that the disruption to supplies from the attacks on its Abqaiq and Khurais processing facilities lasts longer than initially expected. It’s not a long list and much may not be accessible. The attacks cut Saudi production by 5.7 million barrels a day and officials at state oil company Saudi Aramco have become less optimistic on the pace of output recovery. The maximum spare capacity that could be brought into production in the coming weeks is estimated at about 3.9 million barrels a day.That figure should be treated as an exercise in optimism, though. It includes restarting production from the Neutral Zone shared by Saudi Arabia and Kuwait, as well as tapping Saudi Arabia’s own spare capacity, much of which may also have to be processed at the Abqaiq or Khurais facilities and therefore be unusable.

• Saudi Arabia:
  • August production: 9.83 million barrels a day
  • Production capacity: 11.5 million barrels a day
  • Usable spare capacity: up to 1.67 million barrels a day

  On paper, Saudi Arabia has about 1.7 million barrels a day of spare production capacity, but the precise location of that reserve is unclear. If it is in the giant Ghawar, Shaybah or Khurais fields, it’s unlikely to be of any use, as crude from those fields is processed at Abqaiq.There is some spare capacity at offshore fields, such as Manifa and Safaniyah. Offshore crude is not processed at Abqaiq, so these fields could be pressed into service.

• United Arab Emirates:
  • August production: 3.07 million barrels a day
  • Production capacity: 3.4 million barrels a day
  • Usable spare capacity: 200,000 to 330,000 barrels a day

  U.A.E. output peaked at 3.27 million barrels a day in November 2018 and levels beyond that have not been tested on an on-going basis. This suggests the country could boost output by somewhere between 200,000 and 330,000 barrels a day.

• Kuwait:
  • August production: 2.68 million barrels a day
  • Production capacity: 3.15 million barrels a day

Oil prices tumble after Saudi Arabia says production is coming back online – Oil prices dropped sharply Tuesday, following Monday’s surge that sent shock waves around the world. US oil futures settled down 5.7% at $59.24 a barrel. It was the worst one-day drop for US oil since August 1, according to Refinitiv. Oil prices initially fell after Reuters reported Saudi Arabian oil production would return to normal within two to three weeks. Tuesday afternoon, Saudi Energy Minister Abdulaziz bin Salman said the country’s oil exports would not fall in September, as the kingdom will rely on reserves to keep exports stable.Investors took that as a positive sign about the impact of the weekend’s attacks on global oil supply.Brent crude, the international benchmark, settled down 6.5% at $64.55. On Monday, oil prices shot up more than 14%. US stocks finished slightly higher, eking out gains just before the market closed. Stock investors’ focus is turning from oil to the Federal Reserve, which is beginning a two-day monetary policy meeting that will culminate in its interest rate update on Wednesday. Expectations for a quarter-percentage-point rate cut have dropped to less than 50%, according to the CME’s FedWatch tool. That’s down from 92% last week, when the majority still expected rates to be slashed. A half percentage point cut is no longer priced in at all. “There have been a variety of explanations for the change in expectations, be it stronger data last week, improved risk appetite, trade war optimism and even higher inflation potential following the oil price spike,” said Craig Erlam, senior market analyst at Oanda.

Saudi Arabia’s ‘PROOF’ that Iran carried out oil strike: Kingdom reveals wreckage of drones and cruise missiles it claims is ‘undeniable evidence’ Tehran is to blame for attack – Saudi Arabia has today displayed remnants of drones and missiles it said were used in attacks on its oil facilities and described them as ‘undeniable’ evidence that Iran was involved.Defence Ministry spokesman Colonel Turki al-Malki said a total of 25 drones and missiles including Iranian Delta Wing unmanned aerial vehicles were used during the attack on the Abqaiq refinery and Khurais oil field. He said seven missiles either failed to hit their targets or failed to explode, with wreckage of several recovered from the desert. “The attack was launched from the north and unquestionably sponsored by Iran,’ he told a news conference. However, he said Saudi Arabia has not yet managed to establish the exact launch site for the attack but was confident they would find it. It comes after Iran warned America that any military strike will be met with a ‘crushing’ response as the two countries square off over the Persian Gulf following an attack on Saudi Arabia’s oil facilities. Tehran added that it could target ‘more extensive areas than the origin of the attack’ in retaliation for any US strike.President Trump has already ordered a significant increase in sanctions on Iran following the blasts at the Abqaiq refinery and Khurais oil field on Saturday, which the US and Saudi blame on Tehran, and is said to be considering military options.Meanwhile Crown Prince Mohammed bin Salman described the strike as an attack on the global economy in telephone calls with other world leaders on Wednesday.Speaking to France’s Emmanuel Macron, who has offered to send investigators to the Arab nation to help uncover the source of the attacks, Salman said: ‘These sabotage attacks were aimed at destabilising security in the entire region and damaging the global economy as a whole.’ In another call with South Korea’s Moon Jae-in, Salman described the attacks as ‘a test of international resolve’ which ‘threaten global security and stability’.

Saudi oil attacks: All the latest updates -Al Jazeera – Tensions in the Middle East have escalated following drone attacks on two major oil facilities in Saudi Arabia.The pre-dawn attacks on Saturday knocked out more than half of crude output from the world’s top exporter – five percent of the global oil supply – and cut output by 5.7 million barrels per day.Yemen’s Houthi rebels, who have been locked in a war with a Saudi-UAE-led coalition since 2015, claimed responsibility for the attacks, warning Saudi Arabia their targets “will keep expanding”.But US Secretary of State Mike Pompeo swiftly accused Iran of being behind the assault, without providing any evidence. The claim was rejected by Tehran that said the allegations were meant to justify “actions” against it.Saudi Arabia, meanwhile, promised to “confront and deal with this terrorist aggression”, while US President Donald Trump hinted at possible military action.Here are the latest updates:

• Yemen rebel claim over Saudi oil attacks ‘lacks credibility’: France French Foreign Minister Jean-Yves Le Drian said that a claim by Yemeni rebels to have carried out attacks on two Saudi oil facilities “lacks credibility”. “The Houthis, who are Yemeni rebels, announced that it was they who provoked this attack, which lacks credibility,” Le Drian told France’s CNews channel referring to the missile and drone strikes, which the US and Riyadh have blamed on Saudi’s arch-foe Iran. “But given that there is an international investigation let’s wait for the results,” he added.
• Saudi envoy to Germany says all options on the table against Iran: The Saudi ambassador to Germany said all options were on the table in retaliation to attacks on Saudi Arabia’s oil facilities that the kingdom has blamed on Iran. Asked about the possibility of a military strike against Iran, Prince Faisal bin Farhan Al Saud said: “Of course everything is on the table but you have to discuss that well”. “We’re still working on where they were launched from but wherever they came from, Iran is certainly behind them as Iran built them and they could only be launched with Iranian help,” he told Germany’s Deutschlandfunk radio.
• UAE joins US-led coalition to protect Middle East waterways: The United Arab Emirates says it has joined a US-led coalition to protect waterways across the Middle East after an attack on Saudi oil installations.The state-run WAM news agency quoted Salem al-Zaabi of the Emirati Foreign Ministry as saying the UAE joined the coalition to “ensure global energy security and the continued flow of energy supplies to the global economy.”Saudi Arabia joined the coalition on Wednesday. Australia, Bahrain and the United Kingdom also are taking part. The US formed the coalition after attacks on oil tankers that US officials blame on Iran, as well as Iran’s seizure of tankers in the region. Iran denies being behind the tanker explosions.

Oil traders reassess interruption of Saudi output- Kemp – (Reuters) – Brent oil futures prices have gyrated wildly as traders have tried to assess the impact of last week’s attacks on Saudi Arabia’s oil infrastructure on the actual availability of crude. Brent’s six-month calendar spread surged to a backwardation of more than $5.50 per barrel on the first trading day after the attacks, the highest for six years, showing oil traders were anticipating severe shortages in the very short term. Since then the six-month spread has fallen to trade around $4 per barrel, though it is still significantly higher than the $2.70 reported before the attacks. The gap between short- and long-dated futures prices is believed by many traders to be a more useful indicator of the global production-consumption balance than the spot price (https://tmsnrt.rs/31uXMgF). Backwardation, when spot prices trade at a premium to prices for later delivery, is associated with under-production, a tight market and low and falling oil inventories. Contango, the opposite market condition when spot prices trade at a discount, is associated with over-production, a slack market and high and rising stockpiles. Even in the weeks before the attacks, Brent’s backwardation had been ratcheting up as traders anticipated stocks would fall with continued output restraint from Saudi Arabia and the world economy dodging a recession. But the attacks supercharged the backwardation after Saudi Arabia’s national oil company announced it had been forced to suspend production of 5.7 million barrels per day. More recently, the backwardation has eased as Saudi Arabia said output will return to normal by the end of the month, earlier than originally expected. In the meantime, Saudi Arabia has been supplying customers from its own inventories, which amounted to 180 million barrels at the end of July, to cover the shortfall in output. The United States and the International Energy Agency have also promised to make additional oil available from their emergency reserves if necessary, all of which has helped calm fears about shortages.

WTI Extends Losses After Surprise Crude Inventory Build – Oil prices traded down today on the back of confidence Saudi comments about the pace of recovery from the attack on its largest refinery.“During the two past days, we managed to contain the damage by recovering more than half of the production that we had lost during that terrorist attack,” Energy Minister Prince Abdulaziz bin Salman said at a briefing in Jeddah. “Thus the company will be able to meet all its commitments to customers this month by drawing on its crude oil reserves.”While all eyes will remain on Saudi production/supply, we suspect some marginal moves on the heels of inventory data (especially in light of potential storm disruptions).The market will be monitoring for more declines at Cushing, Okla., and overall U.S. crude inventory decreases after the startup of new Permian pipelines, says John Kilduff, partner at Again Capital. API:

• Crude +592k (-2.5mm exp)
• Cushing -846k
• Gasoline +1.6mm (-500k exp)
• Distillates +2.00mm (+500k exp)

After four straight weeks of draws, US Crude inventories showed a surprise 592k barrel build last week (and builds for gasoline and distillates), pressuring WTI prices even lower on the day… WTI hovered around $59 ahead of the API print and extended losses after the surprise build…

Oil Prices Edge Downward – West Texas Intermediate (WTI) and Brent crude oil prices on Wednesday continued their descent following the Saudi oil facility attack-induced surge early in the week. “Petroleum markets continue under the influence of the Saudi situation with the markets reacting in a manner not seen in a very long time on Sunday evening and then coming back down to earth yesterday,” said Steve Blair, senior account executive with the RCG Division of Marex Spectron. Blair noted that prices declined Monday amid reports from Reuters and then the Saudi that output would be restored sooner than expected, that 50 percent of production was already back online and that they would use storage to meet client commitments. The October WTI lost $1.23 to end the day at $58.11 per barrel. The benchmark traded within a range from $57.67 to $59.43. “October WTI has almost come back down to the top of the congestion range that the markets broke out of on Sunday evening and on Monday,” said Blair, referencing a daily WTI price chart. “Support seen beginning around the $57.40 level with further supports at $56.05 and $55.10 and the bottom of the congestion range around $53.70. Resistance levels a bit harder to glean with the huge upside move, but the best level seen stands around the $61 level.” Brent crude for November delivery shed 95 cents Tuesday to settle at $63.60 per barrel. Although the benchmark is also retreating, Blair commented that it has not yet moved as close the upside of the congestion range on its daily chart compared to WTI. “Some minor support seen around the $61.35 level with better supports nearer to $60, which is around the top of the most recent congestion,” Blair said. “Resistance seen around $64 with more as we approach $65.” Also declining during Tuesday’s trading was reformulated gasoline (RBOB). The October RBOB contract settled at $1.66 per gallon, reflecting a nearly two-cent decline.

Oil Algos Confused Despite Bigger Than Expected Crude Build – WTI has extended losses overnight following API’s surprise crude build and President Trump appearing to ease off the war rhetoric and Aramco’s words have eased market fears. “Saudi Aramco has so far shown great crisis-management skills and great resilience, keeping operations ongoing in the attacks’ aftermath and quickly mobilizing recovery and repair crews,” said Samuel Ciszuk, founding partner of consultants ELS Analysis in Stockholm. However, inventories remain a key barometer. DOE:

• Crude +1.06mm (-2.5mm exp)
• Cushing -647k
• Gasoline +781k (-500k exp)
• Distillates =437k (+500k exp)

A surprise crude build last night from API was confirmed by DOE data which indicated a bigger build of 1.06mm barrels (along with builds in gasoline and distillates stocks)… Crude production remains near record highs despite the ongoing decline in rig counts

Saudi Arabia Still Unsure of Launch Site for Oil Attacks— Saudi Arabia said attacks on its critical oil infrastructure were “unquestionably sponsored by Iran” but stopped short of saying the strikes were launched directly from or by the Islamic Republic, claims that could have propelled a drift toward war. With parts of drones and missiles recovered from the attack sites at Abqaiq and Khurais on display, Saudi Defense Ministry spokesman Turki al-Maliki on Wednesday showed maps aimed at proving the strikes originated from the north and could not have been launched by Yemen’s Iranian-backed Houthi rebels, who shortly after repeated their claims of responsibility. “Despite Iran’s effort to make it appear so,” the attack didn’t originate from Yemen, Maliki said. “Data analysis of the attack sites indicate weapons of Iranian origin.” Iran has denied it was involved in the worst attack in Saudi Arabia’s history and President Hassan Rouhani said earlier Wednesday that his country did not want war. The Saudi defense official’s comments, and moves by the U.S., suggested the two allies were also working to deescalate tensions in the region. President Donald Trump, who had initially declared the U.S. “locked and loaded” for a response, said Wednesday he was tightening sanctions on Iran. Iran’s economy is already under severe pressure from existing sanctions, though analysts said there were still a number of potential targets for restrictions. Iran is gradually scaling back its commitments under the deal and has said it will not reopen talks without sanctions relief. Twenty-five pilotless aircraft and cruise missiles were used to attack the two sites, Maliki told reporters gathered in Riyadh. The weapons were of Iranian origin but Saudi Arabia was still working to pinpoint the exact launch point, he said. The range and accuracy of the weapons were beyond the capabilities of the Houthis, he added.

Japan defense minister: Not aware of any Iran involvement in Saudi attacks (Reuters) – Japan has not seen any intelligence that shows Iran was involved in the recent attacks on Saudi Arabian oil facilities, Japan’s new defense chief said on Wednesday. “We are not aware of any information that points to Iran,” Defense Minister Taro Kono told reporters at a briefing. “We believe the Houthis carried out the attack based on the statement claiming responsibility,” he added. Japan has maintained cordial ties with Iran even as relations between Tehran and Washington have deteriorated. Kono on Monday said Japan cannot participate in any military retaliation because of constitutional restraints and would instead pursue a diplomatic solution to the current crisis.

Shell Divests Stake in Saudi Refinery – Saudi Aramco has acquired Shell Saudi Arabia (Refining) Limited’s 50-percent interest in the SASREF refining joint venture for $631 million, Shell and Saudi Aramco reported Wednesday. The companies noted the acquisition follows receipt of all necessary regulatory consents. Located in Jubail Industrial City, Saudi Arabia, SASREF can process up to 305,000 barrels per day of crude oil and is one of the world’s largest export refineries, according to Shell’s website. The facility, which began commercial production in 1985, primarily produces liquefied petroleum gas, naphtha, kerosene, diesel, fuel oil and Sulphur. For Saudi Aramco, taking full ownership of SASREF will enable it to integrate the facility into its expanding downstream portfolio, a company executive stated when the transaction was announced in April of this year. The company also noted Wednesday that its long-term downstream growth strategy calls or increasing the complexity and capacity of its refineries. Meanwhile, Shell has stated the divestiture aligns with its ongoing efforts to integrate its refining portfolio with the company’s trading hubs and chemicals operations.

Saudi Arabia draws down oil stocks to maintain supply after attack (Reuters) – Saudi Arabia will try to maintain oil supplies to its major customers by drawing down crude stored at tank farms in the kingdom and in its global network while repairing and replacing installations damaged in the recent attacks. Saudi Arabia reported domestic crude stocks of 180 million barrels at the end of July, government data supplied to the Joint Organisations Data Initiative showed. Saudi Aramco, the national oil company, also maintains a few tens of millions of barrels of forward storage near its customers in leased tank farms in the Netherlands, Japan and Egypt. Aramco holds crude for strategic reasons to cover emergencies, and for operational purposes to ensure an uninterrupted flow of the right grades of oil to domestic refineries and overseas customers. Domestic stocks were relatively low at the end of July, having fallen by 50 million barrels (22%) since July 2018 and by 150 million barrels (45%) from their post-slump swollen peak in October 2015. The sustained drawdown over almost four years has left domestic stocks at their lowest level since 2007, numbers from JODI showed. (https://tmsnrt.rs/31t0Fyu) At the end of July, stocks were sufficient to cover 18 days’ worth of exports, domestic refinery requirements and direct crude burning in the kingdom’s power stations. Forward cover is down from a recent peak of almost 33 days in October 2015 and is close to the lowest level for over a decade. Stocks should enable the kingdom to maintain supplies to customers in the short term until installations at Abqaiq and Khurais can be repaired/bypassed, or alternative production and processing capacity can be brought online. Saudi Arabia’s energy minister said on Tuesday the kingdom had already managed to recover supply to customers to its pre-attack level – by implication using stored crude. The minister also predicted oil production would be fully restored to its previous level by the end of the month (“Saudi Arabia to restore oil output fully by end of September“, Reuters, Sept. 17).

To keep exports flowing, Saudi Arabia looks to import oil -Less than a week after a withering attack on the heart of Saudi Arabia’s oil industry, the country is pulling out all the stops to do what it has promised it always would: give customers every drop of oil they’ve ordered. Aramco, its state-owned oil giant, is reaching out to foreign producers for crude to send to its domestic refineries, so it can divert its own oil to foreign buyers, according to oil traders. It has also been buying other petroleum products, like refined fuels, from neighbors, reversing the region’s usual trade flow. .. Missiles knocked out roughly half of the country’s crude production, and the disruption to Saudi supplies is having knock-on effects all along the global oil-supply chain. To maintain its reputation as a reliable supplier, the world’s largest oil exporter is looking to buy crude oil from at least one of its neighbors and additional oil products from the global market, oil traders said. Brent crude oil was up 2.8%, at $65.36 a barrel, with minimal early day gains accelerating in the minutes after The Wall Street Journal broke the news that Saudi Arabia is importing oil products and had requested two million barrels of oil from Iraq. West Texas Intermediate futures were up 1.6%, at $59.01 a barrel.

Oil prices rise slightly as Saudi supply risks come into focus — Oil prices rose slightly on Thursday, supported by supply risks brought about by last weekend’s drone attacks on Saudi oil infrastructure and a cut in U.S. interest rates. Brent crude futures gained 72 cents to $64.33 a barrel, while U.S. West Texas Intermediate crude settled up 2 cents at $58.13 a barrel. The attacks knocked down more than half of Saudi Arabia’s crude production and severely limited the country’s spare capacity, a cushion for oil markets in any unplanned outage. “Global available spare capacity is extremely low at present following the weekend attacks, leaving little room for additional outages, which tends to be price supportive,” UBS oil analyst Giovanni Staunovo said. Earlier this week Saudi Arabia set out a timeline for a resumption of full operations, saying it had restored supplies to customers at levels prior to the attacks by drawing from its oil inventories. But it said it would restore its lost production by the end of this month, and bring its output capacity back to 12 million barrels per day by the end of November. “These plans suggest Saudi Arabia will have no spare capacity for at least the next two and a half months and therefore no way to absorb any further shocks,” consultancy Energy Aspects said. Saudi Arabia, the world’s leading oil exporter, has said the crippling attack on its oil sites was “unquestionably sponsored” by regional rival Iran. U.S. President Donald Trump said there were many options short of war with Iran and added that he had ordered the U.S. Treasury to “substantially increase sanctions” on Tehran. Iran has denied involvement in the strikes. The head of the International Energy Agency said on Wednesday it saw no need to release emergency oil stocks as markets were well supplied.

Saudi Arabia to restore oil output fully by end of September: energy minister – (Reuters) – Saudi Arabia will restore its lost oil production by the end of September and has managed to recover supplies to customers to the levels they were at prior to weekend attacks on its facilities by drawing from its huge oil inventories. Energy Minister Prince Abdulaziz bin Salman said on Tuesday that average oil production in September and October would be 9.89 million barrels per day and that the world’s top oil exporter would ensure full oil supply commitments to its customers this month. “Over the past two days we have contained the damage and restored more than half of the production that was down as a result of the terrorist attack,” Prince Abdulaziz told a news conference in the Red Sea city of Jeddah. He said the kingdom would achieve 11 million bpd capacity by end of September and 12 million bpd by end of November. “Oil supplies will be returned to the market as they were before 3:43 a.m. Saturday,” he said, adding that state oil giant Aramco had emerged “like a phoenix from the ashes” after the attack. He was referring to attacks on Saturday on state-owned oil company Saudi Aramco’s plants in Abqaiq and Khurais, including the world’s largest oil processing facility, which shut down 5.7 million barrels per day, which is more than half of Saudi Arabia’s production, or 5% of global output.

Saudi Arabia’s pledge to quickly restore crude production has triggered a repricing of oil – Saudi Arabia’s pledge to fully restore crude production by the end of the month has prompted a flurry of oil market forecasters to reconsider their price projections. “The oil market is facing challenging times,” Carsten Fritsch, energy analyst at Commerzbank, said in a research note published Wednesday. “Recent attacks on oil facilities in Saudi Arabia have painfully demonstrated the risks to oil supply, which is why short-term price spikes are possible at any time.” But, citing weakening market fundamentals, Fritsch explained that the German bank does not consider the recent price surge to be sustainable. Instead, Commerzbank expects the price of Brent oil to fall to $60 per barrel next year. Energy Minister Prince Abdulaziz bin Salman said in a press conference Tuesday that the kingdom would soon have its oil supply back online after a series of drone attacks knocked out 5.7 million barrels of daily crude production. Brent crude futures, the international benchmark, traded at around $63.87 on Wednesday, down around 1%. The contract had previously soared as much as 19.5% at the start of the week, climbing to $71.95 a barrel. U.S. West Texas Intermediate (WTI) stood at $58.39 on Wednesday, more than 1.6% lower. The losses come less than 48 hours after WTI futures posted their biggest one-day climb since 2008.

Saudi oil attacks: Images show detail of damage – BBC News – Satellite images issued by the United States have revealed the extent of the damage to two key Saudi oil facilities attacked by drones at the weekend. The facilities came under attack at 04:00 (01:00 GMT) on Saturday. Online videos showed explosions and large fires at the Abqaiq oil processing facility. In a statement Saudi Arabia later announced the fires had been brought under control within hours, and no one had been killed or injured. However the fires led to the interruption of an estimated 5.7 million barrels in global oil supplies, according to the statement. Analysts have identified at least 17 hits. An unnamed senior US official told ABC News the attacks on the Abqaiq refinery had involved a dozen cruise missiles and more than 20 drones. Abqaiq oil refinery, Saudi Arabia A number of “spheroids” used to process crude oil were hit, apparently with pinpoint accuracy, and fires from blasts at other parts of the facility can also be seen. Analyst Anthony Cordesman from the Center for Strategic and International Studies suggests the attacks could have been carried out using relatively unsophisticated drones operating as “weapons of mass effectiveness”. “It is virtually impossible to secure civilian facilities from a worker or visitor’s capability to use a cell phone to get precise GPS coordinates, commercial satellite coverage is now very good, and there are many ways to produce the kind of image needed for terminal guidance from ordinary photos,” he writes. US officials say the images show damage consistent with coming from a west-north-west direction, not Houthi-controlled territory which lies to the south-west of the refinery. Abqaiq is the world’s largest oil processing facility, and about two-thirds of Saudi Arabia’s total output is refined there. The facility refines crude oil pumped from the Ghawar field, and is connected to both the Shaybah oil field through a 636-km (395-mile) pipeline and an export terminal in Yanbu. Infrastructure at the site, which is about 180km south-west of Abqaiq, also sustained damage. Satellite images show two significant hits to two towers, with scorch marks visible on the ground from a significant fire. The Khurais oil field is believed to produce more than one million barrels of crude oil a day. It has estimated reserves of more than 20 billion barrels of oil, according to Saudi oil company Aramco. .

Saudi Arabia Reveals Damage to Giant Khurais Oil Field – Saudi Aramco revealed the significant damage caused by aerial strikes on its Khurais oil field and Abqaiq crude-processing plant last weekend, and insisted that the sites will be back to pre-attack output levels by the end of the month.Aramco took reporters for a first look inside the facilities, where equipment was scorched and ruptured by the assault on Saturday. In one area lay a pile of debris — a mess of oil melted to asphalt, twisted and charred metal grates, and pieces of fire hose — that stank of tar. While officials promised the plants would be repaired quickly, they also said they were still in the process of evaluating whether some equipment could be fixed or would have to be completely replaced. The Khurais field and processing plant resumed 30% of production within 24 hours of the strike and will produce 1.2 million barrels a day by the end of September, Fahad Al Abdulkareem, general manager for Aramco’s southern area oil operations, said at a briefing on Friday. Workers are there 24 hours a day to speed the repairs, but the site showed significant damage. The Khurais field has a maximum output capacity of 1.45 million barrels a day and processes all of its oil on site, according to Al Abdulkareem. The assault affected four of its crude-stabilization units — 90-meter (300-foot) towers that reduce pressure and remove gas from the crude. One of the columns shown to reporters was a charred wreck, and at least one other was even more badly damaged, he said. Aramco also showed reporters pipes that had been pierced by fragments from the missiles, causing them to spew oil, feeding the fires. Workers were busy replacing segments of piping and insulation at the facilities, and conducting tests on the damaged crude-stabilization columns. The world’s biggest crude exporter has vowed a swift restoration of output at Khurais and Abqaiq after the attack by drones and missiles disabled 5% of global supply. There’s concern in the market about how long it will take the kingdom to fully restore lost production as it depletes inventories to meet supply commitments and operates without its usual buffer of spare capacity. The tour of the Abqaiq plant, which processes crude oil from fields including Ghawar, the kingdom’s largest, also showed extensive damages. The smell of natural gas and other hydrocarbons hung over some areas of the facility. A huge sheet of twisted metal that had been struck by missiles was laid out next to a damaged tank for reporters. The attacks seemed to target with high precision key equipment at both sites, shutting the plants completely even though majority of the facilities were untouched.

Saudi Arabia Partially Restores Output — Saudi Arabia attempted to move beyond the worst oil disruption in its history, assuring the world that crude exports will not suffer, its damaged facility had partially restarted and production capacity would be back to normal within months. The long-awaited statement on Tuesday from the kingdom — which before the strike pumped almost 10% of the world’s oil — gives the market much-needed clarity after days of speculation over how severe was the damage at the Abqaiq plant. However, it’s slower progress than was initially expected and crude prices remain elevated as traders factor in higher risks for Saudi supply. “During the two past days, we managed to contain the damage by recovering more than half of the production that we had lost during that terrorist attack,” Energy Minister Prince Abdulaziz bin Salman said at a briefing in Jeddah. “Thus the company will be able to meet all its commitments to customers this month by drawing on its crude oil reserves.” Slow ProgressAbqaiq has restarted and is now processing about 2 million barrels a day, said Aramco Chief Executive Officer Amin Nasser. The facility should return to pre-attack levels of about 4.9 million barrels a day by the end of September, he said. Soon after the weekend attack, officials indicated that the majority of output would be restored within days, with weeks required to get back to full capacity. That outlook became more pessimistic in subsequent days as photos were released showing the scale of the damage at the crucial facility. Exports MaintainedThe minister and CEO assured customers that Aramco’s crude exports won’t be reduced this month because it will draw down strategic reserves. The kingdom also temporarily reduced the rate at which its domestic refineries process oil by about 1 million barrels a day, making more crude available for shipment overseas.

Fear Of An Iran War Sends Oil Prices Up – It was the wildest week for oil in recent memory. Prices spiked, fell back again, and then rose more modestly on Thursday and Friday. There are still question marks over Saudi Arabia’s ability to repair Abqaiq on as quick a schedule as it claims and Washington and Riyadh are considering their next steps following the attack, with more military action certainly a possibility. If oil prices move higher because of the outage in Saudi Arabia it could spark a higher rate of drilling in U.S. shale, but the likely increase in associated natural gas output is viewed as bearish for gas, according to analysts. “Appalachia producers in particular need to show restraint in order to keep the market balanced into 2020,” Goldman Sachs said in a research note. Natural gas prices have bounced off of their lows from a few months ago, but many see prices taking another downturn. A new pipeline from the Permian could capture a lot more gas that is being flared right now. Moody’s cut its medium-term gas price forecast, and downgraded Range Resources, Antero Resources, Gulfport Energy, and cut EQT’s outlook to negative. Citi said that a supply shock in the oil market, which could push up oil prices, could be occurring at the same time that equities tumble from their highs. The bank said that traders should sell their oil positions to finance bearish bets on equities. “Heightened geopolitics can be simultaneously negative for equity prices through the growth channel and positive for oil prices through supply shocks,” Citi analysts wrote. “Buy S&P 500 puts financed by oil puts.” Saudi Aramco had roughly 50 million barrels of oil in storage before the Abqaiq attack, enough to fill in for disrupted production until the end of the month, when repairs are expected to be completed. However, if the repairs take longer than expected, it would be much harder to cover the gap. “They probably have about one month of inventories,” said Amrita Sen, chief oil analyst at consultants Energy Aspects Ltd. The loss of barrels from Aramco will take time to work its way through the system. “A lot of October arrival barrels were already on the water so the hole is going to show up toward late October,” one senior European oil trader told Reuters. “There has been a mad scramble on the paper markets but the physical scramble will come later.” The Saudi government is pressuring wealthy Saudi families to buy into the forthcoming IPO of Aramco. Sources told the FT that the wealthy were being “bullied” and “strong-armed.”

Oil prices rise as Saudi supply risks come into focus – Oil prices rose slightly on Thursday, supported by supply risks brought about by last weekend’s drone attacks on Saudi oil infrastructure and a cut in U.S. interest rates. Brent crude futures gained 72 cents to $64.33 a barrel, while U.S. West Texas Intermediate crude settled up 2 cents at $58.13 a barrel. The attacks knocked down more than half of Saudi Arabia’s crude production and severely limited the country’s spare capacity, a cushion for oil markets in any unplanned outage. “Global available spare capacity is extremely low at present following the weekend attacks, leaving little room for additional outages, which tends to be price supportive,” UBS oil analyst Giovanni Staunovo said. Earlier this week Saudi Arabia set out a timeline for a resumption of full operations, saying it had restored supplies to customers at levels prior to the attacks by drawing from its oil inventories. But it said it would restore its lost production by the end of this month, and bring its output capacity back to 12 million barrels per day by the end of November. “These plans suggest Saudi Arabia will have no spare capacity for at least the next two and a half months and therefore no way to absorb any further shocks,” consultancy Energy Aspects said.

Oil slips on trade fears but soars in week after Saudi attacks (Reuters) – Oil prices eased on Friday on renewed concern over the U.S.-China trade war, but futures still posted weekly gains, with Brent marking its biggest weekly increase since January, after an attack on Saudi Arabia’s energy industry last weekend. Brent crude LCOc1 futures fell 12 cents to settle at $64.28 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 futures ended 4 cents lower at $58.09 a barrel. Prices pared gains along with the stock and grains markets after Chinese agriculture officials that were due to visit U.S. farm states next week canceled their trip to Montana and Nebraska to return to China sooner than originally scheduled. The cancellation came as trade talks were held in Washington and U.S. President Donald Trump said he wanted a complete trade deal with the Asian nation, not just an agreement for China to buy more U.S. agricultural goods. For the week, however, Brent rose 6.7%, its biggest gain since January, while WTI gained 5.9%, the most since June. U.S. shale producers pounced on the chance to lock in future revenue for this year and next after oil prices surged by the most in 30 years early this week following the attack, sources familiar with the money flows said. Money managers raised their net long U.S. crude futures and options positions by 11,209 contracts to 220,758 in the week to Sept. 17, the U.S. Commodity Futures Trading Commission (CFTC) said. The oil market jumped nearly 20% on Monday in reaction to the Sept. 14 attack, which halved Saudi production and cut global supplies by about 5%. But prices have since pared most of those gains on assurances from the kingdom that it would restore lost production by the end of this month.

U.S. oil prices up 6% for the week, biggest weekly gain in 3 months – Oil futures ended lower on Friday, but tallied a gain of almost 6% for the week, the largest such rise in three months. As the Saudis reveal the extent of damages from the attacks on oil facilities last weekend, “the market mood has shifted to questioning how quickly production can be restored,” Manish Raj, chief financial officer at exploration and production firm Velandera Energy Partners, told MarketWatch. “We are familiar with the repair and maintenance processes in oilfield services, and the damages appear to be far worse than what can be restored within a matter of a few days.” Saudi officials have said they were on track to restore production by month end. October West Texas Intermediate oilCLV19, -0.07%, which expired at the end of the session, fell 4 cents, or 0.07%, to end at $58.09 a barrel on the New York Mercantile Exchange. The new front-month contract, November WTI, lost a dime, or 0.2%, to settle at $58.09.

Military strike against Iran would result in ‘all-out war’: Zarif – (Reuters) – Any U.S. or Saudi military strike against Iran would bring “all-out war”, Tehran said on Thursday, keeping up a drumbeat of warnings to its adversaries after they accused the Islamic Republic of a strike on Saudi oil facilities. The United States has been discussing with Saudi Arabia and other Gulf allies possible responses to Saturday’s attack, which they blame on Iran and which U.S. Secretary of State Mike Pompeo described as an act of war on the kingdom. “I am making a very serious statement that we don’t want war; we don’t want to engage in a military confrontation … But we won’t blink to defend our territory,” Iranian Foreign Minister Mohammed Javad Zarif told CNN in an interview. Asked what the consequence of an American or a Saudi military strike on Iran would be, Zarif said “an all-out war”. Zarif earlier warned on Twitter that what he described as the B team – including Israeli Prime Minister Benjamin Netanyahu and Saudi Crown Prince Mohammed Bin Salman – was deceiving U.S. President Donald Trump into a war against Iran. Meanwhile, a senior advisor to Iran’s top authority Supreme Leader Ayatollah Ali Khamenei called on Gulf countries to “come to their senses”, Iran’s semi-official Fars news agency reported. “They (U.S. and Saudi Arabia) have realized that playing with the tail of a lion is highly dangerous and that if they take action against Iran at any time, they know there will be no tomorrow for them in the region,” Fars quoted Hossein Dehghan as saying.

Iran’s warning to Saudi Arabia about all-out war is ‘ridiculous,’ Saudi’s Al-Jubeir says – Iran’s recent warnings to Saudi Arabia are “ridiculous” and “laughable” Saudi minister of state for foreign affairs Adel al-Jubeir told CNBC amid ongoing investigations by the kingdom tying Iran to a major attack on its oil facilities. Iranian Foreign Minister Javad Zarif said in an interview Friday that he hoped to avoid conflict, but that Iran was prepared for “all-out war” in the event of attack by Saudi or U.S. forces. He then questioned whether Saudi Arabia was ready to fight “to the last American soldier.” “This is not the first time Iran’s foreign minister has said something ridiculous and frankly laughable,” he told CNBC’s Hadley Gamble in Riyadh on Saturday. His comments come amid a state of heightened tension between Saudi Arabia, Iran and the U.S. following drone and missile attacks on two Saudi oil facilities a week ago. The attacks, claimed by Yemen’s Houthi rebels, shut down half of Saudi Arabia’s oil production. Saudi Arabia and the U.S. have suggested that Iran had a role in, or was responsible for, the attack on Saudi Aramco’s Abqaiq and Khurais oil facility. Iran has denied the accusations, calling them “meaningless” and “pointless.” Asked about next steps, the minister asserted that Saudi Arabia was responsible for its own defenses ⁠ – which were criticized as having failed to effectively counter the drone and missile attacks ⁠ – but stressed the international community’s role in reigning in what he called Iran’s aggressive behavior. “It is our responsibility to protect our borders, our people, our infrastructure ⁠ – but the world also has responsibility to make sure Iran isn’t allowed to get away with murder, to ensure freedom of navigation in the Gulf and Arabian Sea so global energy supply isn’t disrupted,” he said. Engagement with Iran, like the efforts of Germany and France in launching a trade mechanism that would bypass U.S. sanctions, is nothing more than appeasement and will only condone the country’s behavior, al-Jubeir added. “If you think being lax with Iran will make it behave better, that hasn’t happened in 40 years and won’t happen,” he said. “The idea that Iran can be offered loans we believe is appeasement. Anytime anybody has appeased Iran in the last 40 years, Iran has used that to cause mischief.”

How Saudi Arabia failed to protect itself from drone and missile attacks – Questions have abounded all week as to how Saudi Arabia, the planet’s third-highest defense spender and steward of the world’s largest oil facility, allowed itself to fall victim to a drone and missile attack that wiped out half of its crude production in a day.“The Saudi leadership has a great deal of explaining to do that a country that ranks third in terms of total defense spending … was not able to defend its most critical oil facility from these kinds of attacks,” former U.S. diplomat Gary Grappo told CNBC on Tuesday.The stakes for the future of Saudi Arabia’s ability to defend itself are global.Brent crude saw its largest price jump ever as markets opened this week, and the commodity’s next moves depend heavily on Saudi oil giant Aramco’s ability to recover its production capacity and defend itself from similar attacks. Investors are likely asking themselves how the kingdom could have left itself so vulnerable and what that means for the future of oil, global markets and the long-awaited Aramco public stock offering. So how did the Saudis, who in 2018 spent an estimated $67.6 billion on arms – second only to the U.S. and China – fail to defend their economic jugular vein? Quite simply, the kingdom’s defenses – no matter how high-tech – are designed for entirely different kinds of threats. The low-flying and relatively cheap drones and cruise missiles purported to have been used in Saturday’s attack are a fairly new challenge that many nation states are not in fact prepared to counter.It also doesn’t help that massive oil plants are just easy targets.“Saudi oil assets are vulnerable for the simple reason that when flying over them at night, they stick out against the desert background like a Christmas tree,” Michael Rubin, a former Pentagon official and Middle East expert at the American Enterprise Institute, told CNBC in an email. “This means that enemies don’t need high-tech GPS-guided drones, even though they might have them, but can also use relatively lower technology drones.” Twenty-five drones and missiles were used in the Saturday strikes on state oil giant Saudi Aramco facilities Abqaiq and Khurais, Saudi’s defense ministry said. While claimed by Yemen’s Houthi rebels, Saudi and U.S. officials say Iran was responsible, a charge Tehran has denied. Dave DesRoches, an associate professor and senior military fellow at the National Defense University in Washington, D.C., told CNBC: “If an attack is of a different threat than the system was designed for – that is a low-altitude cruise missile instead of a high-altitude ballistic missile – then the system will not intercept it.”

Yemen’s Houthis Announce Halt on Attacks Against Saudis, Expect Reciprocal Steps From Riyadh -Houthi militants earlier claimed responsibility for the recent attack on Saudi oil refineries that crippled the country’s crude output for days. Riyadh, however, has claimed to have determined that the downed drones and missiles used in the assault were of Iranian origin. Tehran has denied involvement in the incident.Head of the Houthi political council Mahdi al-Mashat has announced that the movement is ceasing its attacks against Saudi Arabia with the use of drones and other weapons. In turn, the Houthis expect Riyadh to issue a similar statement, promising to stop carrying out attacks on Yemeni territory.Al-Mashat added that the Houthis reserve the right to respond if Saudi Arabia ignores the offer. The statement comes almost a week after the Houthis claimed responsibility for attacking Saudi Aramco oil refineries on 14 September, which crippled the country’s oil production and spiked crude prices globally. However, Riyadh had its own version of events, claiming that Iran had sponsored the aerial strike. The Saudi military on 19 September presented pieces of the missiles and drones used in attack, insisting that they are of Iranian origin. The US has supported these accusations, with Secretary of State Mike Pompeo calling it an “act of war” on Iran’s part.

Human Trafficking is Booming in Yemen as the War Enters Its Fifth Year The offensive war on Yemen, the most impoverished nation in the Middle East, was launched in 2015 by a U.S.-backed coalition of Arab countries led by Saudi Arabia, the richest nation in the Middle East. It has plunged a nation already struggling to provide basic services to its citizens into chaos, a nation now ruled by a ragtag consortium of different groups all thirsting for power. The result? A complete absence of law and order that has given rise to a black Suq (market) of human trafficking on a scale never before seen in Yemen.Thirty-five-year-old Tawfiq hails from Amran, a small city in west-central Yemen famous for its ancient mud-brick high-rises dating back two millennia to the Sabean kingdom. Tawfiq was among 17 Yemeni victims of human trafficking who agreed to speak to MintPress about their harrowing ordeals. In 2016, Tawfiq – desperate to bring money home to his family, as the then-fledgling war decimated the already shaky Yemeni economy – was told by a friend that he could earn as much as $7,000 for one of his kidneys. Days later Tawfiq was on a bus to Saudi Arabia, traveling through al-Wadeeah port on the Yemen-Saudi border.Today, Tawfiq suffers from complications arising from his kidney extraction and is now unable to carry heavy objects. He told MintPress, “I thought that removing a kidney would be a simple arrangement, but now I live in a hell of pain and suffering.” Tawfiq’s operation was crude and involved no follow-up care. Ismail, the owner of a small electronics store in Taiz, told MintPress, as he pointed to the place where one of his kidneys use to reside, “I needed money to feed my children.” Ismail hesitated while he recounted his story, worried that the shame of what he had done would reach his family. Yet thousands of Yemeni civilians who are living in abject poverty as a result of the ongoing war are willing to allow a part of themselves to be cut out and sold in order to be able to sustain their families.

Emirati-Flagged Ship Seized By Iran In Strait Of Hormuz On Suspicion Of Smuggling Diesel – Following reports that it’s planning to release a UK-flagged oil tanker that it seized two months ago, Iran has reportedly seized a UAE-flagged vessel in the Strait of Hormuz on Monday and detained its 11-member crew. The IRGC, which was responsible for seizing the vessel, accused it of smuggling diesel. The ship was reportedly carrying 250,000 liters of diesel when it was captured, along with 30 handheld flares, which are sometimes used for facilitating clandestine transfers at sea. The ship’s crew are reportedly being held in the coastal city of Bandar Lengeh, though it’s unclear where their ship is being held.”The ship was seized nearly 20 miles to the east of Greater Tunb with 11 seamen onboard while heading to the Arab United Emirate,” IRGC general Ali Azmaei told Iranian media.The capture was initially reported by Iran’s FARS news agency, according to a tweet by Al Arabiya, a Saudi news organization.

Saudis, Israel attacked pro-Iran militias on Syria-Iraq border – report – Both Israel and Saudi Arabia have been blamed for recent airstrikes targeting pro-Iranian militias in the Albukamal area in Syria near the border with Iraq, according to Arab media. The attacks resulted in a number of deaths and injuries and the destruction of weapon storage facilities and rocket launchers. “Saudi fighter jets have been spotted along with other fighter jets that have attacked facilities and positions belonging to Iranian militias,” said an unnamed source to the Independent in Arabic. The attacks targeted positions belonging to the Quds force of the Iranian Revolutionary Guard Corps in Albukamal and other areas near the Iraq-Syria border. According to the source, it is believed that Iran was about to use the facilities to hit other targets after targeting the Saudi Aramco oil facilities on Saturday. The source added that the Global Coalition Against Terrorism has started targeting not just ISIS, but also other groups such as the Quds Force and various Iraqi and Iranian militias active in Syria, Iraq and other areas. Saudi sources later denied the report, according to the Independent in Arabic. Pro-Iranian militias in Albukamal in Syria near the Iraqi border have been targeted by multiple airstrikes since Monday night, resulting in at least 15 deaths, according to Arab media. On Wednesday, five people were killed and another nine were wounded in an airstrike carried out by unidentified aircraft that targeted positions of the Iranian-backed Iraqi Popular Mobilization Forces militia in Albukamal, according to Sky News Arabia. After the strike on Wednesday, the PMF in the town of Al-Qaim in Iraq near the Syrian border began to take precautionary measures in anticipation of an airstrike, including not assembling in large groups and the deployment of heavy weapons near some sites.

Israeli Attacks On Syria Halted After Russia Threatened To Shoot Down Jets – According to reports in both Israeli and Arabic regional media, Israel this past week was preparing to expand major airstrikes against “Iran-backed” targets in Syria, but Moscow imposed its red line. The Independent has published a story describing that Russia’s military in Syria threatened to shoot down any invading Israeli warplanes using fighter jets or their S-400 system.The Jerusalem Post, citing sources in the UK Independent (Arabia), writes just after the latest meeting in Sochi between Prime Minister Benjamin Netanyahu and Russian President Vladimir Putin:According to the report, Moscow has prevented three Israeli airstrikes on three Syrian outposts recently, and even threatened that any jets attempting such a thing would be shot down, either by Russian jets or by the S400 Anti-aircraft missiles. The source cited in the report claims a similar situation has happened twice, and that during August, Moscow stopped an airstrike on a Syrian outpost in Qasioun, where a S300 missile battery is placed. Netanyahu’s hasty trip to meet with Putin on Thursday – even in the final days before Tuesday’s key election – was reportedly with a goal to press the Russian president on essentially ignoring Israel’s attacks in Syria.

Russia hosts Taliban delegation following collapse of US talks – A Taliban delegation has held talks with Russian officials in Moscow after US negotiations with the Afghan insurgents collapsed, the Russian foreign ministry has said.“The Russian president’s special representative for Afghanistan … Zamir Kabulov, hosted a Taliban delegation in Moscow,” said a ministry spokesman, quoted by RIA Novosti state-funded news agency.No date for the talks was given.“The Russian side stressed the need to relaunch negotiations between the United States and the Taliban movement,” the spokesman said.“For their part, the Taliban confirmed their willingness to pursue dialogue with Washington.”An official from the Taliban said on Saturday the visit came as the insurgent group looked to bolster regional support, with visits also planned for China, Iran and Central Asian states.“The purpose of these visits is to inform leaders of these countries about the peace talks and president Trump’s decision to call off the peace process at a time when both sides had resolved all outstanding issues and were about to sign a peace agreement,” said a senior Taliban leader in Qatar. The Taliban leader, who spoke on condition of anonymity, said the purpose of the visits was not to try to revive negotiations with the US but to assess regional support for forcing it to leave Afghanistan. Until a week ago expectation had steadily mounted of a US-Taliban deal that would see the US withdraw around 5,000 troops from Afghanistan in exchange for the Taliban offering security guarantees to keep extremist groups out. But last week Trump revealed he had cancelled an unprecedented meeting between the Taliban and himself secretly scheduled for Camp David, and declared the talks with the militants “dead”.

Around 14,000 U.S. Troops Remain In Afghanistan – After the cancelled talks between U.S. President Donald Trump and the Taliban, it is most likely that U.S. troops currently deployed in the country will remain there without a set time for return for now. Currently, it is estimated that around 14,000 U.S. troops, among them active duty personnel, members of the National Guard and Reserve as well as Civilians (contractors, DOD employees), remain in Afghanistan. As Statista’s Katharina Buchholz notes, between 2013 and 2015, the bulk of the personnel stationed in the Central Asian country was pulled out, as our graphic shows. Since then numbers have been fluctuating reflecting the uncertainty around the U.S. military’s prolonged mission to the country. In 2018, the Trump administration stopped publishing detailed accounts of the troops in Afghanistan through Department of Defense records, but it is likely that the Army still makes up the majority of forces deployed to the country. The U.S. military engagement in Afghanistan is America’s longest war. The current NATO-led operation in Afghanistan is called “Resolute Support” and aims to train and advise the Afghan security forces.

U.S. drone strike kills 30 pine nut farm workers in Afghanistan (Reuters) – A U.S. drone strike intended to hit an Islamic State (IS) hideout in Afghanistan killed at least 30 civilians resting after a day’s labor in the fields, officials said on Thursday.The attack on Wednesday night also injured 40 people after accidentally targeting farmers and laborers who had just finished collecting pine nuts at mountainous Wazir Tangi in eastern Nangarhar province, three Afghan officials told Reuters. Graphic on Afghan civilian casualties – here “The workers had lit a bonfire and were sitting together when a drone targeted them,” tribal elder Malik Rahat Gul told Reuters by telephone from Wazir Tangi.Afghanistan’s Defence Ministry and a senior U.S official in Kabul confirmed the drone strike, but did not share details of civilian casualties. “U.S. forces conducted a drone strike against Da’esh (IS) terrorists in Nangarhar,” said Colonel Sonny Leggett, a spokesman for U.S. forces in Afghanistan. “We are aware of allegations of the death of non-combatants and are working with local officials to determine the facts.”About 14,000 U.S. troops are in Afghanistan, training and advising Afghan security forces and conducting counter-insurgency operations against IS and the Taliban movement.Haidar Khan, who owns the pine nut fields, said about 150 workers were there for harvesting, with some still missing as well as the confirmed dead and injured.

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