Oil price jump linked to Saudi Arabian attacks sparks energy stock rally


The bomb attacks ramped up tensions around the Persian Gulf once again, just as the spectre of conflict between the United States and Iran was beginning to fade away after a summer that saw attacks on oil tankers and an American drone shot down.

Trump tweeted on Monday morning after United States officials made the case that the strike on Saudi facilities came from north or northwest, which would put Iran and Iraq in cross hairs, rather than from Yemen where the Iran-backed Houthi militia claimed responsibility.

Now they say that they had nothing to do with the attack on Saudi Arabia.

Now they say that they had nothing to do with the attack on Saudi Arabia.

Those tensions have increased ever since Trump pulled the USA out of Iran's 2015 agreement with world powers that curtailed its nuclear activities and the U.S. re-imposed sanctions on the country that sent its economy into freefall.

But a senior US official told ABC News Saturday that was false: "It was Iran".

"No matter whether it takes Saudi Arabia 5 days or a lot longer to get oil back into production, there is but one rational takeaway from this weekend's drone attacks on the Kingdom's infrastructure - that infrastructure is highly vulnerable to attack, and the market has been persistently mispricing oil, which Citi reckons should have been a good $10 a barrel higher than it has been for months", Citi analysts wrote to clients in a note.

A Saudi-led coalition has been battling Iran-backed Houthi rebels in Yemen for over four years, with the Houthi's carrying out several cross-border missile and drone attacks.

Tensions have been high since Trump withdrew the USA from the Iran nuclear deal in May 2018 and strictly reimposed sanctions, including on Iran's oil industry - its economic lifeblood.

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The attack on Saturday was a reciprocal measure by "Yemeni people" to assaults on their country, Iranian President Hassan Rouhani said.

"This behavior is unacceptable and they must be held responsible", Perry said of Iran.

The tweets followed a National Security Council meeting at the White House that included Vice President Mike Pence, Secretary of State Mike Pompeo and Defense Secretary Mark Esper.

Brent, the worldwide oil benchmark, saw prices surge over 10% Monday to just shy of $67 a barrel.

The US said it is poised to release its oil reserves to cover any short-fall, but experts still warned that gas prices will be hit, with those on the West Coast worst affected. The State Department did not immediately acknowledge what was discussed.

"The Americans adopted the "maximum pressure" policy against Iran, which, due to its failure, is leaning toward 'maximum lies, '" Iranian Foreign Ministry spokesman Abbas Mousavi said in a statement.

This image provided on September 15, 2019, by the USA government and DigitalGlobe and annotated by the source, shows damage to the infrastructure at Saudi Aramco's Abaqaiq oil processing facility in Buqyaq, Saudi Arabia. Pompeo said Tuesday that Trump was "prepared to meet with no preconditions".

In an escalating series of moves, Tehran has sought to counter or undermine those sanctions - attacking a handful of oil tankers, seizing others and their crews and assaulting Saudi oil facilities, according to US officials. The Washington-based Center for Strategic and International Studies has said the area includes "storage tanks and processing and compressor trains - which greatly increases the likelihood of a strike successfully disrupting or destroying its operations".

"The genie is out of the bottle", Bill Farren-Price, director of the London-based RS Energy Group, said.