September 14, 2019 / 11:06 AM / Updated an hour agoInstant View: Reactions to attack on Saudi oil facilities
Following are reactions to the attack:....
....SANDY FIELDEN, ANALYST AT MORNINGSTAR:....MUCH MORE
“It takes 19-20 days to ship Ras Tanura (Saudi) to Singapore, but 54 days from Houston to Singapore. So U.S. ‘relief’ will take time. The real issue here is how much stocks the Saudis have to supply the market until their production is fixed.
“The obvious short-term fix would be waivers on Iran sanctions, but politically that’s a hard pill for the Trump administration to swallow. By all accounts the Iranians have tankers full of storage ready to go.
“Many countries have strategic stocks for exactly this reason. The price (of oil) is going to jump all right, but the Saudis and U.S. have a day to run interference on their positions before then. The most scary result would be a Saudi escalation of the war in Yemen. Then the whole Gulf gets trigger-happy.”
JASON BORDOFF, FOUNDING DIRECTOR, CENTER ON GLOBAL ENERGY POLICY, COLUMBIA UNIVERSITY, NEW YORK:
“Abqaiq is perhaps the most critical facility in the world for oil supply. Oil prices will jump on this attack, and if the disruption to Saudi production is prolonged, an SPR (Strategic Petroleum Reserve) release from IEA members seems both likely and sensible.
“This is a reminder why, despite America’s becoming a net-zero oil importer, the SPR remains a key strategic asset. Sanctioned Iran supplies are another source of potential additional oil, but (U.S. President Donald) Trump has already shown he is willing to pursue a maximum pressure campaign even when oil prices spike.
“If anything, the risk of tit-for-tat regional escalation that pushes oil prices even higher has just gone up significantly. Will the Saudis feel the need to respond? Will the Americans? I don’t know, but the point is this: Every new attack increases the risks of an unintended escalation to military conflict as each side feels compelled to respond in some way to the preceding incident.”
ROBERT MCNALLY, HEAD OF RAPIDAN ENERGY GROUP, BETHESDA, MARYLAND:
“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 million bpd 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.”
JAMES KRANE, MIDDLE EAST ENERGY SPECIALIST, RICE UNIVERSITY’S BAKER INSTITUTE:
“This is a pretty serious escalation of the proxy war between Iran and Saudi Arabia. With something like this, we might see the U.S. get dragged in. Iran is telling us ‘you need to put us on the front burner.’ They’re not going to be put out of the picture forever. With (former U.S. national security adviser John) Bolton out, who knows? It is hard to see that Bolton’s departure isn’t part of the calculus. Iran is stepping up what they see is its defense and looking for us to make the next move, and we’ve just fired the hardest-line guy in the cabinet.
“Asian countries are more at immediate risk because they are the big importers from Saudi Arabia, with 80% of Saudi exports going to East Asia. For the United States, the main threat is in the price of oil, it’s not in the immediate supply.
“The asymmetry of this is obvious. You have one of the world’s largest consumers of advanced weaponry basically defenseless in the face of drones that cost less than $1,000 and from a country that is so poor and disorganized it is undergoing a cholera epidemic and widespread starvation”....