Sep 15, 2019

Trump to release oil from strategic reserve "if needed"

President Trump said via Twitter Sunday that he has authorized release of oil from the U.S. Strategic Petroleum Reserve "if needed" in response to the attacks against Saudi Arabia's oil infrastructure.

Why it matters: The statement signals high-level White House concern about the effect of the Saudi production outages on the global market.

  • Crude oil prices are surging Sunday evening as markets opened in Asia.
  • Brent crude soared by over $11-per-barrel to nearly $72-per-barrel in trading in Singapore before falling back to $67, per Bloomberg data. (The price will keep moving so check the link for the latest.)

Where it stands: Saudi officials say the attacks took 5.7 million barrels per day worth of production offline — over half of the kingdom's output.

  • It's unclear when full production from the world's top crude exporter will be fully restored. But per the Wall Street Journal, state oil giant Aramco hopes to restore 1/3 of the output by Monday's end.

Quick take: There's also a political dimension to the administration's posture, because the White House likely wants to avoid gasoline price increases heading into an election year.

The International Energy Agency, which coordinates emergency supply management with member nations, said in a statement yesterday that "For now, markets are well supplied with ample commercial stocks."

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Oil price spikes expected after attacks on Saudi facilities

Smoke billows from an Aramco oil facility. Drone attacks sparked fires at two Saudi Aramco oil facilities. Photo: AFP/Getty Images

Crude oil prices are expected to surge when Asian markets reopen Sunday night (U.S. time) as traders respond to Saturday's attacks against major oil processing and production sites in Saudi Arabia.

Why it matters: The alleged drone strikes, which took large volumes of production offline, are stark evidence of security risks facing OPEC's largest producer and the world's largest crude oil exporter.

Go deeperArrowSep 15, 2019

Saudi Arabia says oil output to be restored by month's end

Saudi Energy Minister Prince Abdulaziz bin Salman. Photo: -/AFP/Getty Images

Saudi Arabia hopes to fully restore oil output curtailed by Saturday's attacks by the end of September and have already revived 50% of the lost production, the kingdom's energy minister said Tuesday, per multiple reports.

Why it matters: The comments by Prince Abdulaziz bin Salman — and an earlier Reuters report of the rough timeline — are putting downward pressure on oil prices, which had soared in the wake of the attacks against a major processing plant and oilfield.

Go deeperArrowSep 17, 2019

Saudi oil sites hit by drone strikes: U.S. blames Iran

Smoke billowing from an Aramco oil facility following the Houthi attacks. Photo: AFP/Getty Images

Iran denied Sunday U.S. accusations that it was behind drone attacks targeting the world's largest oil processing facility at Abqaiq and a major oil field at Khurais in Saudi Arabia the previous day.

The latest: Yemen's Iranian-backed Houthi rebels claimed responsibility for the early Saturday strikes, AP reports. But U.S. Secretary of State Mike Pompeo blamed Iran, saying "there is no evidence the attacks came from Yemen." Iranian Foreign Ministry spokesperson Abbas Mousavi said in a statement the U.S. accusations were "blind, incomprehensible and meaningless."

Go deeperArrowUpdated Sep 15, 2019