RIYADH – The weapons used to strike Saudi oil facilities were Iranian-made, the Riyadh-led coalition said Monday, heightening fears of regional conflict after the U.S. hinted at a military response to the assault. The weekend strikes on Abqaiq -- the world's largest oil processing facility -- and the Khurais oil field in eastern Saudi Arabia have roiled global energy markets sending prices spiking Monday. Yemen's Iran-aligned Houthi rebels claimed responsibility for the strikes but Washington has squarely blamed Iran, with President Donald Trump saying the U.S. is "locked and loaded" to respond. Saudi's energy infrastructure has been hit before, but this strike was of a different order, abruptly halting 5.7 million barrels per day (bpd), or about 6 percent of the world's oil supply. The Saudi-led coalition, which is bogged down in a five-year war in neighboring Yemen, reiterated the assessment that the Houthis were not behind it, pointing the finger at Iran for providing the weapons.
BEIRUT – A senior official with the main U.S.-backed force in Syria says his fighters have captured the country's largest gas field from the Islamic State group in an eastern province that borders Iraq. Nasser Haj Mansour of the Syrian Democratic Forces says the Conoco gas field came under full control of the group on Saturday after days of fighting with the extremists. Britain-based Syrian Observatory for Human Rights, which tracks the war in Syria, says SDF fighters have not yet taken the field in the province of Deir el-Zour, saying fighting is ongoing outside it. SDF fighters have been marching on the east bank of the Euphrates River in Deir el-Zour while Syrian troops are gaining in areas on the west bank of the river under the cover of Russian airstrikes.
US President Donald Trump says Saudi Arabia's King Salman has agreed to his request to increase oil output "maybe up to" two million barrels, as state media in Riyadh confirmed a phone call between the two leaders about oil but mentioned no specifics. Trump's claim on Saturday comes after the Organization of the Petroleum Exporting Countries (OPEC), a grouping of oil producing states that includes Saudi Arabia, already agreed to ramp up production by a million barrels a day at a meeting earlier this month. Non-OPEC member Russia on June 23 also backed the effort, capping a week of tense diplomacy for the bloc that averted a damaging rift between arch foes Iran and Saudi Arabia. "Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction [sic] in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference," the US president wrote on Twitter on Saturday. Trump added, without specifying the timeframe for the increased production or whether his two million figure referred to barrels per day.
Oil prices rose Thursday as Saudi Arabia discussed cuts to crude oil sales in compliance with a deal established by the Organization of Petroleum Exporting Countries (OPEC) and intended to boost profits among member-states, however, investors remained skeptical of the oil-rich kingdom's commitments. As part of the November deal, Riyadh reluctantly agreed to cut its output by 486,000 barrels per day, or over 4.6 percent of the 10.544 million barrels per day it turned out in October. State-run Saudi Aramco, the world's most valuable oil company, discussed how these reductions would be implemented with one source estimating cuts of 3 to 7 percent were being considered. "Aramco is approaching all its customers for possible cuts from February and discussing likely (supply) scenarios," the source told Reuters. Despite the talks, OPEC investors remained uncertain whether the organization's 13 members - Saudi Arabia, Iran, Algeria, Iraq, Venezuela, Nigeria, Qatar, the United Arab Emirates, Libya, Kuwait, Ecuador, Gabon and Angola - would abide by the output reductions to which they agreed.
HOUSTON – Saturday's attacks on key Saudi Arabia processing plants will test the world's ability to handle a supply crisis as it faces the temporary loss of more than 5 percent of global supply from the world's biggest crude exporter. The Iranian-backed Houthis group in Yemen claimed responsibility for attacks that shut two plants at the Abqaiq facility, the heart of the Saudi oil industry, which will cut the kingdom's production by about 5.7 million barrels per day (bpd) -- more than half of the kingdom's output, according to a statement from state-run Saudi Aramco. Crude prices could spike by several dollars per barrel when markets open Sunday night as a prolonged outage could prompt the United States and other countries to release crude from their strategic petroleum reserves to boost commercial stocks globally. The U.S. Energy Department said Saturday it is ready to release oil from its strategic reserve if needed. "Oil prices will jump on this attack, and if the disruption to Saudi production is prolonged, an SPR release … seems likely and sensible," said Jason Bordoff, founding director of the Center on Global Energy Policy at Columbia University in New York.