Saudi Arabia Oil Attacks – Stock Market News — American intelligence indicates Iran was the staging ground for a debilitating attack on Saudi Arabia’s oil industry, people familiar with the discussions said Monday, as Washington and the kingdom weighed how to respond.
The assessment, which the U.S. hasn’t shared publicly, comes as President Trump raised the prospect of a joint U.S.-Saudi retaliatory strike on Iran, a scenario that risks quickly broadening into a regional armed conflict.
U.S. officials shared with Saudi Arabia the images, intelligence reports, and their assessment that Iran launched more than 20 drones and at least a dozen ballistic missiles at the Saudi oil facilities on Saturday, the people familiar said.
The Saudi-led coalition leading the war in Yemen said Monday the weapons used to hit the kingdom were Iranian, in its first assessment of the weekend attacks. The coalition dismissed Yemeni Houthi rebels’ claims of responsibility for the strikes. And Secretary of State Mike Pompeo told Iraqi leaders that the U.S. didn’t believe their country was used to carry out the attacks.
But Saudi officials said the Americans didn’t provide enough proof to conclude that Iran was the staging ground and didn’t blame Iran, indicating the U.S. information wasn’t definitive. U.S. officials said they planned to share more information with Riyadh in the coming days. Unless Riydah makes the same determination, the U.S. would have trouble in its attempt to galvanize regional support for a unified response, said Western officials and analysts in the region.
Asked by reporters on Monday whether Iran is responsible for the attacks, Mr. Trump said: “Well, it’s looking that way.” Mr. Trump, who had been scheduled to meet with the Crown Prince of Bahrain on Monday, before the attacks took place, said that the U.S. is prepared for war “if we have to go that way.”
“With all that being said, we’d certainly like to avoid it,” he added, noting that diplomacy is “never exhausted until the final 12 seconds.” Mr. Trump noted that the Saudis “very much” want U.S. protection but he expects them to take a significant role if any action is taken. He said he took the decision Sunday to release the country’s strategic oil reserves “Just in case we ran a little bit low on oil.”
After weighing the Trump administration information, Saudi Arabia announced that it was going to invite United Nations experts to come investigate the attacks, a decision likely to prolong the debate over any military response. Saudi Arabia said it would wait for the results of any such investigation before deciding how to respond.
In Washington and Riyadh, government officials are split over how to respond. Some want to strike Iran military, while others worry that an attack could trigger a wider regional fight, said officials in both countries.
The Saturday attack hit the heart of Saudi Arabia’s oil industry with a series of drone and missile strikes that left Riyadh reeling. The country is struggling repair the damage and limit the fallout to the energy industry.
Brent crude, the international benchmark for crude prices, was up over 14% on Monday at $68.51, one of the biggest one-day increases in memory. Higher fuel prices pose another threat to the world economy amid a U.S.-China trade dispute, although Saudi and U.S. officials said they would ensure that the oil market remains well supplied.
As a result of the attack, Saudi Arabia is considering whether to delay plans by Aramco, Saudi Arabia’s state oil-and-gas company, for an initial public offering, The Wall Street Journal reported Monday, citing people familiar with the matter.
The developments have already undermined efforts to broker a meeting between Mr. Trump and Iranian President Hassan Rouhani next week at the United Nations General Assembly. Iran said on Monday that its president wouldn’t meet Mr. Trump after the U.S. said it was open to such a meeting.
Mr. Rouhani on Monday said the attack was an act of self-defence by Yemeni Houthi rebels, who are allied with Tehran. “Every day, Yemen is being bombed and peaceful civilians are dying,” Mr. Rouhani said during a trilateral summit with Russian and Turkish counterparts in Ankara. “When security is restored in Yemen, then it will be possible again to produce oil safely in [Saudi Arabia].”
The latest attacks pose a critical test for the U.S.-Saudi relationship, especially for Mr. Trump and Saudi Crown Prince Mohammed bin Salman, the country’s de facto ruler. They have both shifted their country’s foreign policies toward confrontation with Iran.
Mr. Trump met Monday with his national security team to discuss the attacks on Saudi Arabia and escalating tensions in the Middle East, said a person familiar with the meetings.
Mr. Trump and his team, which included Secretary of Defense Mark Esper and acting national security adviser Charles Kupperman, discussed possible military action against Iran, but made no decisions, said a second person familiar with the discussions.
Mr. Trump has warned that the U.S. is “locked and loaded,” but that it is waiting for Saudi Arabia’s assessment of the attacks before deciding what to do next. “Both President Trump and Mohammed bin Salman feel the need to respond but neither wants war,” said Robert Malley, president of International Crisis Group and former White House Middle East coordinator under President Obama. “The question is how they achieve the former without provoking the latter.”
The U.S. has taken the lead in providing security for the Persian Gulf monarchies for decades in part out of a strategy of protecting the world’s oil supply. As a result, observers of the region expect Saudi Arabia might defer any military action to the U.S.
“At the end of the day, conventional military action is a last resort for any state, and it is something that would be done in coordination with regional and international stakeholders,” said Mohamed Alyahya, a Saudi political analyst and editor of the English website of Saudi-owned al-Arabiya television.
“Any reaction whatsoever, or lack thereof, will have significant consequences on the future of the region,” he said. On Monday, Mr. Trump tweeted a reminder of Iran’s behavior when it shot down a U.S. drone in June, a strike that led the U.S. to prepare a military strike against Iran. Mr. Trump called off the strike after having second thoughts.
“Remember when Iran shot down a drone, saying knowingly that it was in their ‘airspace’ when, in fact, it was nowhere close,” he said. “They stuck strongly to that story knowing that it was a very big lie. Now they say they had nothing to do with the attack on Saudi Arabia. We’ll see?”
The weekend strikes marked the most significant attack in a simmering conflict pitting America and its Middle East allies against Iran and its proxies around the region.
Mr. Trump imposed crippling sanctions on Iran that have delivered a blow to the country’s economy. Iran’s crude oil production capacity was nearly 4 million barrels a day before the revival of U.S. sanctions, making it a leading oil supplier. The country’s refining capacity now is roughly half that amount.
In recent months, the U.S. has accused Iran of carrying out a series of attacks in the region, including blasts that crippled several tankers in the Persian Gulf.
The prospect of U.S. military action drew divergent reactions from lawmakers. Sen. Lindsey Graham (R., S.C.) called over the weekend for the U.S. to put an attack on Iranian oil refineries “on the table.”
Others cautioned against military action. Sen. Mitt Romney (R., Utah) warned on Twitter Monday that any “direct engagement by U.S. military in response to Iran’s attacks on Saudi oil infrastructure would be a grave mistake.”
Sen. Tim Kaine (D., Va.) was more blunt: “The U.S. should never go to war to protect Saudi oil,” he tweeted on Sunday.
Saturday’s strikes demonstrated how a war with Iran could be devastating for Saudi Arabia, with the lifeblood of the kingdom’s economy vulnerable to attack despite hundreds of billions of dollars spent on its military.
The attacks have amplified the pressure on the Saudi government to respond. Its air defenses have failed to stop the attacks on Saturday and other incidents involving the Houthis in the months before, despite the kingdom having the world’s third-largest military budget. The Saudis have spent hundreds of billions of dollars spent over the years on tanks, jet fighters and other hardware.
Among other weapons, the kingdom has both American-made Patriot and Hawk missile systems, both of which failed to stop a series of drone and missile attacks since May. The Saudi government says it has shot down several drones in the past.