Iran Warns Of ‘Full-Fledged War’ If Attacked Over Aramco Disaster. Analysts Fret Over Possible $100 Oil

Iran Warns Of ‘Full-Fledged War’ If Attacked Over Aramco Disaster. Analysts Fret Over Possible $100 Oil

Iran on Sunday warned the US against retaliatory strikes following Saturday’s drone attacks on Saudi Arabia’s oil infrastructure.

“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”, IRGC commander Amirali Hajizadeh said, according to Tasnim. He also suggested Tehran is prepared for “full-fledged war”.

On Saturday, Lindsey Graham called for US strikes on Iran’s oil refineries.

Read more: Pompeo Says Aramco Drone Attacks Didn’t Originate In Yemen, Graham Calls For Strikes On Iran’s Oil Refineries

Iranian foreign ministry spokesman Abbas Mousavi called Mike Pompeo’s allegations against Tehran “pointless” on Sunday. “Such allegations and blind and fruitless remarks are meaningless and not understood in diplomatic framework”, he said, adding that “the Americans have opted for a policy named ‘maximum pressure’ against Iran, but it has apparently tilted towards maximum lies for their failures”.

Mousavi also “noted that such hostile remarks by the US officials sound like the plots of the intelligence agencies and secret services to distort the face of a country in a bid to lay the groundwork for future moves”, Fars wrote, recapping, in language befitting of a state propaganda machine.

Javad Zarif, whose surprise cameo at the G-7 last month was the talk of Biarritz, mocked Pompeo in a tweet. “Having failed at ‘max pressure’, Mike Pompeo is turning to ‘max deceit'”, Zarif said, before suggesting that yet again, America has failed to understand the nature of asymmetric warfare. “The US [and] its clients are stuck in Yemen because of the illusion that weapon superiority will lead to military victory”, he chided. “Blaming Iran won’t end [that] disaster [but] accepting our April ’15 proposal to end the war and begin talks may”.

Meanwhile, Iraq has rejected the idea that the drone attacks originated on its soil. “Iraq is constitutionally committed to preventing any use of its soil to attack its neighbors”, Prime Minister Adel Abdel Mahdi said in a statement. “The Iraqi government will be extremely firm with whomever tries to violate the constitution”.

Obviously, that’s laughable. Iran’s clout in Iraq is a continual source of consternation for Washington and it is entirely possible that Quds-allied militias in the country launched the attacks on Saturday. In the same series of tweets that found Trump’s top diplomat lashing out at Zarif, Pompeo said the US has “no evidence” to support the contention that the drones came from Yemen.

Irrespective of the details, Iran was, of course, behind the attacks. Whether they originated in Yemen or Iraq is relevant in terms of where things go from here, but the only way Tehran isn’t ultimately responsible is if you want to float a false flag theory, which seems wildly implausible in this case. (One imagines nobody would be on board with blowing up Abqaiq just to give the US an excuse to bomb Iran, especially not at a time when Trump just fired John Bolton in the interest of paving the way for prospective talks with Hassan Rouhani.)

Europe is alarmed. “Yesterday’s attack… poses a real threat to regional security”, a spokeswoman for EU foreign policy chief Federica Mogherini said in a statement. “At a time when tensions in the region are running high, this attack undermines ongoing work at de-escalation and dialogue”.

As far as crude prices go, there’s speculation about a spike to $100 in the event it takes longer than expected for Aramco to bring lost production back online. Sources on Sunday said it may take weeks to fully restore capacity.

The following excerpts are from Reuters’ summary of initial analyst takes (these are truncated – the full article from Reuters is available here):


Crude prices LCOc1 would spike by at least $15-20 per barrel in a seven-day disruption scenario and go well into triple digits in a 30-day scenario.

“This does not include what are likely to be large (if difficult to model or predict) premia to reflect zeroing out of global spare production capacity amidst ongoing disruption risks, hoarding, and panic sentiment.”


Expects Brent futures to open $2 per barrel up and close $7 to $10 per barrel higher on Monday. The market could see a return to $100 per barrel if the issue cannot be resolved in the short term.


“I’d expect a $3-$5 move in oil prices in the short term. The market has been sleep-walking in risk premium in the region, disproportionately focusing on risk to demand growth and shale oil supply.”

“This attack introduces a new, irreversible risk premium into the market.”

Expects oil to rise to $80-90 a barrel over the next three-six months as the market turns its focus to geopolitics.


23 thoughts on “Iran Warns Of ‘Full-Fledged War’ If Attacked Over Aramco Disaster. Analysts Fret Over Possible $100 Oil

  1. Anyone know the state of Saudi oilfield/refining air defense? For drones, a ballistic missile interceptor like THAAD (LMT) likely won’t work; don’t know if a Patriot type system (UTX) is ideal. Seems like you’d want something like a Phalanx (UTX). Anyway, Saudis will presumably be beefing up defenses.

  2. Well we oughta have something to offer in the works rather than 3 million dollar patriots. The Army publicly predicted these types of attacks in 2017 and highlighted the economic undermining of our defenses. Then again if we may have coordinated this whole shebang so the economics of using million dollar missiles to shoot down 10 thousand dollar drones is just another false premise. Typical republican in power, big oil, big defense, big war premise for re-election; tyranny. Beautiful set up much less clumsy that the previous group of republican shit for brains chickenhawks who successfully executed their evil.

    1. Drones are slow and fragile, and it should be fairly easy and cheap to defend a refinery against drone attack. You’d use multiple trailer mounted Phalanx systems. They will destroy a drone at 4000 yards with just $1000 of 20 mm cannon shells. Phalanx will also destroy incoming mortars, missiles, aircraft, etc.

      Saudis should have bought dozens of these systems years ago. Someone’s head should be rolling now.

      No way the Saudis staged this attack on themselves.

    1. So you’re suggesting that Saudi Arabia deliberately knocked out 5.7 million b/d of their own production capacity just to give themselves an excuse to buy some weapons and the US an excuse to attack Iran? If so, that is wildly silly

      1. Of all the actors involved, Houthi rebels, Iranian propaganda outlets, the Iraqi Government, whoever, the absolutely least credible is Mike Pompeo. He is a mouthpiece of the Trump Administration and a political hack. Go back and watch any public speech or interview at random from the last two and a half years, on any subject, and see how well his statements hold up with the wisdom of hindsight.

        Saudi Arabia has made itself a lot of enemies in the Gulf. The war in Yemen has devolved into a civil war within a civil war with Saudi Arabia and the United Arab Emirates backing different sides. Saudi Arabia is also trying to isolate Qatar. The Saudi regime benefits from both higher oil prices and tensions with Iran. Did they bomb themselves? Prolly not, but the drones are cheap and easy to replicate and Saudi Arabia has the incentive to be less than diligent in stopping them, and in any event blaming Iran backed by the neo-cons and warhawks in both the American and Israeli Administrations. The Middle East is fiendishly complex at the best of times, and I would be extremely skeptical about any official statements from Bonesaw, MAGA, or Netanyahu.

        1. Harvey, as usual this comes with all due respect because you’re a loyal reader and your comments are among the best on this platform, but you’re preaching to the choir here. As you’re aware, i spent decades in political science academia. that said, the saudis didn’t blow up 5.7 million b/d of their own oil capacity and they didn’t knowingly collude with anyone in that effort. that’s like me saying “well, I love sticking it to the insurance company for high premiums, which is why I shot myself in the dick today”.

          now if you wanted to say that maybe they sabotaged themselves knowing they could fix it quickly or something along those lines, maybe that’s plausible, but here’s this from BofA:

          Saudi Arabia maintained strategic stocks of c190mn bbl as of June, according to JODI data. Should the production loss be fully translated to exports, then the strategic stocks would last c1 month. This suggests that Saudi Arabia would be forced to deplete its stocks within a few weeks to keep its level of exports stable, and would be unable on its own to prevent a disruption to markets beyond that point.

          They then have to rebuild those stocks, which will be complicated by the OPEC+ deal.

          The point is, it’s always possible there’s a grand plan/scheme/conspiracy, but it isn’t: “Let’s blow up Abqaiq and see what happens!”

          1. Also, there is nothing “credible” about Iran’s semi-official news agencies. that’s silly. nobody trusts Trump and nobody trusts Pompeo and obviously nobody trusts Netanyahu. but this isn’t like “Oh, well maybe there’s some truth to the trade banter from China’s Commerce Ministry” or “well, the Global Times and the People’s Daily are clearly silly but when it comes to trade they’ve got a few points”. There is nothing credible about Tasnim or Fars. They’re just KCNA without the lady in the pink robe.

          2. I would think it was possible that some local Houthi leader(s) did it without approval from Tehran–especially if they thought that Iran might use them as a disposable bargaining chip. Spoilers are pretty common in messy transnational conflicts like this.

          3. Hey, maybe the country with the third highest defense budget globally couldn’t defend the “most valuable real estate in the world” from cheap drones flown hundreds of miles undetected from battered militias from maybe the south or, no, maybe the north. I sincerely concede the possibility, but I will take the other side of that bet. Someone in Saudi Arabia helped.

          4. Asymmetric warfare works. If it didn’t, the war in Yemen would have been over about 3 months after the Saudis invaded in 2015. Plus, it seems unlikely that ol’ Qasem would be praising the Houthis on Twitter if the Quds didn’t sanction this. I’ll take the cryptic Twitter brag from Soleimani over what comes out of Zarif and the foreign ministry any day.

      2. I suggest following the money, follow who ultimately benefits, it damn sure is not Iran. I am saying we have gone to war in the middle east based on contrived information before and we did not hold our evil doers to account!

    2. What does Iran have to gain? An oil price shock could make Trump further soften his stance toward Iran to keep oil pumping, prices down, and the U.S. economy afloat. Alternatively, Iran may just be escalating its conflict with Saudi Arabia; the departure of Bolton was a pretty clear signal that Trump’s stance wasn’t really all that hard to begin with anyway, so perhaps Iran is just taking advantage of what they perceive as weakness.

  3. when they don’t know what to say

    and have completely given up on the play

    just like a finger they lift the machine

    and the spectators are satisfied.

    – Antiphanes

  4. My main question is; why would the US believe it has the right to bomb Iran in response to an attack on Saudi Arabia? I’m aware that Trump and company would come up with arguments about destabilization of the ME and/or international oil supplies, but SA has been doing it for years, but does the USA have the right to intervene when it hasn’t been attacked itself?

  5. No one ever figured out the JFK thing or the 9-11 affair to any degree of satisfaction either…This of this matter will come from someone whom you trust not those whom you can’t trust which turns out to be a bulk of the players in the ME (including USA )….You can never rule out any of the self interested or rogue elements either who may well be the sleeper Candidates for starting WW3….Seeing the realities more along the lines that Harvey expressed in this blog…

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