Saudi attacks send oil prices soaring

Our live coverage of the Saudi oil attacks has moved here.

Pakistani Prime Minister Imran Khan

Saudi Crown Prince Mohammed bin Salman received a phone call from Pakistani Prime Minister Imran Khan on Monday who expressed Pakistan’s “support” with the Kingdom, state-media Saudi Press Agency (SPA) reported.

According to SPA, Khan said Pakistan stands with the Kingdom “in confronting these sabotage acts, which threaten the global economy and the Kingdom’s security.”

President Trump on Monday downplayed the dangers of the attack on Saudi Arabian oil facilities wreaking havoc in international oil markets.

He said the US is well positioned because of both the strategic petroleum reserve and US energy output. 

President Trump again addressed the attack on Saudi Arabian oil facilities and Iran’s alleged role in the attack as he left the White House for New Mexico on Monday.

The President said he’s on the same page as Secretary of State Mike Pompeo and is looking at all the intelligence coming in. 

“I think we’re the same. I think we just want to find out the final numbers and see. You look at a vector, and you look at … there are lots of different things we can look at David and we’ll know for certain over the next very short period of time,” Trump said.

And once everything is analyzed, he said, “Well then we’re gonna decide what sort of response there would be.

Trump then was asked what kind of response there would be, and he clarified the question saying, “Would this be proportionate, is that what you’re asking. I would say, ‘yes.’”

He also said the stock market has “been holding pretty firm considering what happened with respect to Saudi Arabia.” 

The Ministry of Foreign Affairs of Saudi Arabia issued a statement on Monday saying initial investigations show Iranian weapons were used in the attack and investigations are ongoing to determine the source of the attack.

The statement is similar to remarks made earlier on Monday by Saudi-led coalition spokesperson Lieutenant Colonel Turki al-Malki. 

The MOFA statement, which was posted on Saudi’s state news agency SPA, also thanked the international community for condemning and denouncing the Saturday attack and invited the UN and international experts to participate in the investigation. 

President Trump said Monday that “it’s looking like” Iran was behind the recent oil attack in Saudi Arabia, but wouldn’t definitively announce that the country was behind it.

Trump said he doesn’t want war with Iran.

“I don’t want war with anybody,” the President said, but added that the US was prepared for any war ahead. “We’d certainly like to avoid it.”

Asked about what options he’s looking at, Trump said he wasn’t looking at any, emphasizing that the US still needs to confirm who perpetrated the attack.

On a United Nations General Assembly meeting with Iranian president Hassan Rouhani, Trump said: “I have no meeting scheduled. I know they want to meet. I know they’re not doing well as a country.”

Trump said Secretary of State Mike Pompeo and others will be heading to Saudi Arabia “at some point.” He also said they’d be making a statement soon.

“But they also know something that most people don’t know as to where it came from. Who did it … we pretty much already know,” Trump said.

The UK has condemned the “attack on the Aramco oil facilities in Saudi Arabia,” British Foreign Secretary Dominic Raab tweeted on Monday.

Iranian President Hassan Rouhani said that the “root cause” of the oil attack “goes back to the Yemen problem.”

Rouhani spoke at a news conference with his Russian and Turkish counterparts in Ankara Monday, and was responding to a question from a reporter of whether or not the attack was discussed during the summit.

Rouhani did not respond directly to claims from the Saudi-led coalition that the weapons used in Saturday’s attack were Iranian. He instead kept the focus on the “Yemen problem.”

“As far as the drones issue is concerned, it had to do with oil, but I look at it more as a question of security and stability, rather than oil,” Rouhani said.

The Iranian leader said that once stability and peace returns to Yemen, then naturally, “the oil that seems to be of so much concern for everyone will also be produced and exported in security and stability.”

Russian President Vladimir Putin also responded saying the issue of the attack was not discussed during the summit.

“You know what the situation of Russia is, we are determined to avoid a serious humanitarian catastrophe,” Putin said. “We believe that the best way of solving this crisis is to get an agreement between all the parties that are involved in that crisis.”

Over the next few days Saudi Arabia’s Crown Prince Mohammed Bin Salman and his father, King Salman, face the biggest decision of their lives at they respond to the attacks on Saudi oil facilities.

Get it wrong and the region could burn. Get it right and the desert Kingdom could prosper and reform as the ambitious Crown Prince plans.

The dilemma is to strike a balance between punishment and persuasion: To go for Iran’s jugular and unleash withering rounds of strikes on Iranian targets inside Iran or hold back, take the moral high ground, prove your case and win international backing for what ever course of action you take.

But here’s trouble for MBS and his father: In this region, if you play cautious and swallow your pride today, you could deal with it for the rest of your life.

It is a test that the Crown Prince cannot choke: If he does, his dreams of reform will turn to dust.

A little about the company: Aramco, the oil company that was the target of this attack, is the cash cow he needs to milk to turn the country’s economy away from hydrocarbons and keep the next generation of young Saudis in employment. Get the response to the attack wrong and confidence in the company will tumble, taking its value with it.    

Two weeks ago in an apparent bid to speed a long discussed Aramco IPO, he replaced his energy minister with his half brother and switched out the Aramco boss for another close confidant. Whatever reasons he had for shifting gear then will look even starker now.

He must act decisively and without reasonable fear of retaliation. A second wave of similar attacks — something the Houthi rebels have threaten, whomever they are speaking for — would be disastrous for confidence in Aramco and the IPO.

MBS must be strongman, diplomat and peace maker all in one. Failure can not be an option. 

Iranian President Hassan Rouhani did not mention Saturday’s attack on Saudi oil facilities in his opening remarks in a trilateral summit with his Turkish and Russian counterparts in Ankara Monday.

He kept the focus on the crisis in Syria and maintained his position on America’s role in Syria.

“The American president last year spoke of the withdrawal of his country’s troops and forces from the Syrian territories,” Rouhani continued, “but unfortunately those words did not become reality.” 

Rouhani again urged for American presence to be removed from Syria to move forward.

“We must pave the way, leave behind all animosities and adhere to the will and the wishes of the Syrian people,” Rouhani said.

The US has told at least one US ally in the Middle East, that they have intelligence showing that the launch was “likely” coming from staging grounds in Iran, but they have not shared that intelligence yet. “It is one thing to tell us, it is another thing to show us,” said a diplomat from the region.  

A US official separately tells CNN that the US has assessed that the attack originated from inside Iran. The official spoke on condition of anonymity.

No public evidence has been shared.

What countries in the region decide to do, in reaction to the Saudi oil field attack, largely depends on what the US is willing to do, the source said. CNN reported earlier that Secretary of State is expected to speak with the UAE Crown Prince on Monday and other nations.  

The Pentagon declined to comment. The State Department and the White House did not respond to a request for comment. 

The WSJ first reported that the US was telling countries region that the attacks were launched inside Iran.

More context: The attack on oil facilities in Saudi Arabia likely involved cruise missiles and attack drones, a separate US official familiar with the intelligence assessment told CNN earlier today. The official said that the attacks did not originate from Iraq but would not say whether they originated from Iran or Yemen. Iraq’s Prime Minister issued a statement Monday saying that Secretary of State Mike Pompeo had told him that the attacks had not originated from Iraq. The State Department when asked about the call, said “no comment.”

The US maintains an enhanced awareness of the airspace over Iraq given US military operations there as part of the counter-ISIS coalition. 

While the Iran-backed Houthis in Yemen have used attack drones in the past, those attacks have typically been launched against Saudi targets close to the border.

The recent attacks against the Saudi oil facilities would represent a major improvement in the Houthis ability to accurately hit targets at a much greater distance than previously demonstrated.

Kelly Craft, the US Ambassador to the United Nations, addressed the attacks on Saudi oil facilities during an unrelated Security Council meeting on Yemen, calling it “deeply troubling.”

” I’d like to briefly address the deeply troubling attacks on Saudi oil facilities that occurred this past weekend,” Craft said. “The United States condemns these attacks in the strongest possible terms standing firmly with our Saudi friends.”

As of 11 a.m. ET, US oil is trading at more than $60 a barrel in New York on Monday morning. That’s about an 11% change.

What this means for gas this fall: Gasoline futures, meanwhile, were up more than 9%.

“This is a big deal,” said Tom Kloza, chief oil analyst for the Oil Price Information Service, which monitors the price of oil across the United States. “It is the biggest shock to the oil markets since [Hurricane] Katrina. And like Katrina it will likely haunt us for months, at least weeks.”

Kloza said gasoline prices will likely “creep up” this fall, rather than drop steadily, as they historically have done.

Here’s a look at the current oil disruption, and how it compares to others:

Saturday’s attack on two vital oil facilities in eastern Saudi Arabia used Iranian weapons, Saudi-led coalition spokesman Lieutenant Colonel Turki al-Malki said in a news conference today.

“All practical evidence and indicators and the weapons used in both attacks show preliminarily that these are Iranian weapons,” he said, without providing details on the weapons.

He also said the attack was not launched from Yemen. (Remember: Yemen’s Houthi rebels on Saturday claimed responsibility for the attack, saying they conducted the strikes — using 10 drones — in retaliation for Saudi Arabia’s military campaign against the group in Yemen.)

Col. al-Malki said Saudi Arabia is still working on identifying the exact launch location of this attack.

He added that “terror attack” was targeting world oil supplies and the global economy and not Saudi Arabia. The results of the ongoing investigation will be announced soon.

“The kingdom of Saudi Arabia will take all procedures in correspondence with international law,” he said.

What the US is saying: Earlier today, a US official familiar with the intelligence assessment told CNN the recent attack on oil facilities in Saudi Arabia likely involved cruise missiles and attack drones. The official said that the attacks did not originate from Iraq but would not say whether they originated from Iran or Yemen.

The US maintains an enhanced awareness of the airspace over Iraq given US military operations there as part of the counter-ISIS coalition. 

Top administration officials are meeting again this morning at the White House amid ongoing discussions about the attack on Saudi oil facilities and Iran’s role in the attack, a senior administration official said.

The National Security Council Principals Committee — a gathering of top Cabinet officials with foreign policy purview and the vice president — are meeting this morning at the White House to discuss options for a US response.

Secretary of State Mike Pompeo is expected to make calls to the region on Monday, following Saturday’s attack on Saudi oil facilities, several diplomatic sources tell CNN.

Pompeo is expected to call the UAE Crown Prince today, per a diplomatic source.

The US military posture in the Middle East has not changed following Saturday’s attack on Saudi Arabia’s oil facilities, according to a US defense official. 

But note: Typically following attacks in the region, US forces are put on alert as a standard practice.  

Also the US has an enhanced capability in the region following a plus-up of additional forces that occurred several months ago. 

US stocks opened lower on Monday as investors worried about the economic impact of an attack on Saudi oil production. Disruptions to global oil supply sent crude prices soaring.

About oil prices: US oil is up 9.8% at more than $60 a barrel, while the international oil benchmark Brent is up 10.4% at $66.47 a barrel.

Energy stocks are among the strongest performers thanks to the rising oil prices. Chesapeake Energy jumped more than 15%. Exxon Mobil and Chevron were some of the strongest Dow stocks at the open.

Airlines were hit by the same dynamic, as fuel costs will likely rise. Delta, American Airlines and Untied all opened in the red.

Here’s a look at how the attacks have disrupted oil:

CNN’s Nic Robertson is in Riyadh, Saudi Arabia, where officials have not yet “pointed a finger of blame” for the attacks, he said.

Robertson said the kingdom’s newspaper headlines hold a clue into the government’s thinking: The main headlines emphasize that the United Nations is worried about the escalation of tensions in the region, he said.

Watch more:

President Trump implied that Iran may have been involved in the strike on a Saudi Arabian oil facility — but he stopped short of directly blaming the country on Twitter.

Remember: Iran has denied it was involved in the attack. Yemen’s Houthi rebels said they’re responsible for the attacks, but US officials say the more likely culprit is either Iran or Iraq.