“Tehran is behind nearly 100 attacks on Saudi Arabia while Rouhani and Zarif pretend to engage in diplomacy”, Mike Pompeo said on Saturday afternoon in the US, following one of the most brazen attacks on Saudi Arabia’s oil infrastructure in history.
Half of the kingdom’s production was affected after 10 explosive drones hit Abqaiq and Khurais.
Aramco convened an emergency meeting to assess the situation, and said it hopes to have lost output back online within “days”. The company is still evaluating the damage at Abqaiq, which the head of Rapidan Energy Group in Washington reminds you is “the single most valuable piece of real estate on planet earth”.
“Today, President Trump spoke with Crown Prince Mohammad Bin Salman to offer his support for Saudi Arabia’s self-defense”, White House spokesman Judd Deere said, adding that “the United States strongly condemns today’s attack on critical energy infrastructure”.
It looks like Pompeo (a notorious Iran hawk in his own right, if not quite on par with the recently dismissed John Bolton), is prepared to suggest the strikes were launched from Iraq by Quds Force-affiliated Shia militias. “Iran has now launched an unprecedented attack on the world’s energy supply”, he said, on the way to insisting that “there is no evidence the attacks came from Yemen”.
Earlier this summer, US officials said drone attacks on Saudi oil pipelines in May did not originate from Yemen, but rather from southern Iraq. Although the Houthis initially took credit, the US claimed it was likely the work of Iranian militias or, more to the point, proxy armies operating at the behest of Quds commander Qasem Soleimani, who praised Saturday’s Aramco attacks in a tweet.
At the time, Pompeo asked the Iraqi government to “take steps to ensure that Iraq isn’t used as a new staging ground for attacks”.
“United Nations investigators have written that the Houthis have advanced drones that could have a range of up to 930 miles [leaving] open the possibility that drones used Saturday had flown from Houthi-controlled territory in Yemen”, the New York Times notes, but cautions that “they may also have been launched in another country, such as Iraq, or from inside Saudi Arabia itself”.
One researcher said the drones deployed in the attack could have cost less than $15,000 to build, underscoring the futility in trying to stop these types of strikes before they happen.
(Photographer: Shagul Tamil via Storyful)
As documented here at length early Saturday, this a major incident. “This is the mother lode for an attack on Saudi infrastructure”, the Times quotes RBC’s Helima Croft as saying. “We have always been concerned about an attack on Abqaiq”.
Rapidan president (who was one of W.’s energy advisers), Robert McNally, remarked that a successful attack on Abqaiq is “about the worst thing energy security planners think about”. Here’s a bit of extended commentary from McNally as carried by Reuters:
Today’s attack on the Abqaiq processing facility constitutes a paramount oil bullish, equity bearish, and global growth negative risk. Details are scarce, but early press reports indicate some 5 mb/d of Saudi production is impacted. The videos on Twitter suggest large-scale damage, though it is possible some of the fire is due to emergency flaring procedures associated with the shutdown. Aramco reportedly said it expects production to restart quickly, suggesting damage may be light. Even if that proves to be the case, such a brazen attack by an Iranian proxy on the crown jewel of the Kingdom of Saudi Arabia’s energy system will raise the overall geopolitical risk premium.
He went on to predict that this means any plans to ease sanctions on Iran are “on ice”.
John Bolton is probably chucking from beneath his famous mustache about now. He was, of course, dismissed by Trump after an Oval Office meeting at which the lifting of some sanctions on Iran was discussed as a way to secure a meeting with Hassan Rouhani. Not surprisingly, Bolton thought that was a bad idea.
“Forget about easing sanctions”, Rapidan’s McNally said Saturday. “We are talking about a step up on geopolitical risks”.
“Violent actions against civilian areas and infrastructure vital to the global economy only deepen conflict and mistrust”, the White House’s Deere chided, saying the US is “monitoring the situation and remains committed to ensuring global oil markets are stable and well supplied”.
For his part, Lindsey Graham called for US strikes on Iran’s oil.
“It is now time for the US to put on the table an attack on Iranian oil refineries if they continue their provocations or increase nuclear enrichment”, Graham said Saturday. “Iran will not stop their misbehavior until the consequences become more real, like attacking their refineries”.
Great idea Lindsey. That will surely calm things down.