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🛢️ Oil Resource Wars
« on: June 24, 2019, 12:55:03 AM »
New Official Thread for all war actions globally that are directly connected to oil.  They are all connected of course, but some are super-obvious.


The West Just Made A Big Mistake In Middle East
By Cyril Widdershoven - Jun 23, 2019, 4:00 PM CDT

US politics have always been a bi-partisan affair. Two blocks fighting each other without taking into account possible repercussions of their decisions on global geopolitics and markets.

The current decisions made by the US Senate put Washington now in the same league as the UK, which finds itself in a political stalemate due to Brexit crisis. At a time that the world is watching a possible show-down in the Persian Gulf, the US Senate, in all its wisdom, has decided to increase US pressure on one of its only remaining allies in the region, Saudi Arabia. Not only has Washington put Saudi Arabia on a blacklist of countries that do not play a sufficient role in fighting human trafficking, the US Senate has also voted to block further military deals with the Kingdom. For some to add a country to a list is not a real newsworthy move, but in Saudi Arabia, currently leading the US sponsored anti-Iran block, it will be seen as a slap in the face.  The legal repercussions are small, as countries normally will shrug it off without any problems, but at a time of regional conflict and a possible Iranian military action, the U.S. needs full support of its Gulf-based allies.

What makes the situation worse, is that due to a geopolitical-military strategy put in place by US president Trump, targeting the removal of the Iranian regime, Arab Gulf countries are on the receiving side of Iran’s wrath at present. The widely published attacks on tankers in the Gulf of Oman, the downing of an US drone above Iranian waters, and the continuing barrage of rockets and drones coming from the Iran-supported Houthi controlled areas in Yemen on energy infrastructure and airports, put Saudi Arabia and the UAE as targets on the frontline.

Without US military support, Saudi Arabia, the UAE and Bahrain, will be at the mercy of Iran and its proxies, as the Arab militaries in the Gulf cannot stand up to Iranian aggression. Other partners in the region include Egypt and Israel, but these countries are looking to stay out of the conflict. To confront Iranian proxies in the region, Western arms are needed to keep the balance in place, and will work as a deterrent against Iranian proxy attacks.  The US Senate vote to block new military supplies and sales to Saudi Arabia could tip the scales in the next couple of weeks. Even if President Trump is expected to veto the Senate decision, Arab leaders again are confronted by the inherent political volatility of dealing and relying on Western support. Ever since the Arab Spring, these countries are already wondering where their future lies, will it be within the Western sphere of influence or will they look to the (far)-East? Washington’s behavior could also tip this into a pro-Russia or China move very soon.

Related: Is This The Beginning Of The End For Tesla’s Solar Business?

At the same time, European partners, such as Germany and UK, are also showing an increased anti-Arab sentiment. After the almost factual German blockade of military sales to the region, the only real strong partner for Saudi Arabia and the UAE, the UK now also could be ending their military support very soon. A British court has ordered that arms sales to the region are illegal, as they are or could be used in the Yemen conflict, with Saudi Arabia as the main perceived culprit.

The Arab Gulf States, except Qatar, now find themselves looking for a new arms dealer. For most Arab countries this move is not only a threatening development, but is also seen in the light of the continuing military contracts signed with Qatar, at present a semi-outcast in the Gulf region, due to its close ties with Iran and Turkey.  The one-sidedness of the US-UK and even German strategies is flabbergasting for the Sunni Arab countries in the Gulf and Egypt.

For the US and UK the current moves could become a Rubicon situation. Trump needs the Arab support to form a front against Iran, while access to Arab military is needed in case of a military confrontation with Tehran. At the same time, Washington and London need to be at the Arab tables to discuss not only security but also energy politics. By affronting people such as Saudi Crown Prince Mohammed bin Salman, Egypt’s president Sisi or Abu Dhabi’s Crown Prince Mohammed bin Zayed, an anti-US front also could emerge, even within the OPEC+ discussions the coming weeks. Until now US-Western energy security has been incorporated in the OPEC+ discussion. The latter could change dramatically soon, putting Riyadh/Abu Dhabi firmly in the corner of Russia for the foreseeable future.

Related: Is Bakken Oil Production Set For An Unexpected Drop?

With no access to defense technology and hardware from the West, Arab nations will have to find other solutions. The main available supplier is Russia and its defense industry is more than happy to jump into the gap. By binding Arab Gulf states and Egypt to Moscow, a new geopolitical reality could emerge, threatening the West’s economic and energy interests directly. All of this could happen at a time that the future of the Gulf is in peril, and energy markets are very volatile. Western leaders need to reconsider their approach.

MBS/MBZ and Sisi will not go public and threaten Trump at present in the media. The Arab leaders are used to play chess on several boards. It will be very interesting to see the views of the respective ministers of oil the coming weeks if the U.S. and Europe start to complain about oil prices. The Arab reactions will be very icy, while Russia will be reaping the rewards. Oil and gas analysts should be very aware of the geopolitical impact on crude if Arab producers are not looking at supply and demand constraints, but are led by security threats coming from US Senators or UK Courts. In the end, even for OPEC, “power comes out of the barrel of a gun”. Looking at the current situation in the Gulf region, this needs to be taken literally. Trump’s party has an Elephant as its symbol, but Arab leaders are like Elephants in reality, they never will forget!
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🛢️ Oil Pipelines Sabotaged In Syria
« Reply #1 on: June 24, 2019, 06:35:27 PM »
So far, these "sabotage" events seem calculated to raise the FEAR level rather than do any major damage.


Oil Pipelines Sabotaged In Syria
By Irina Slav - Jun 24, 2019, 11:30 AM CDT

Five underwater pipelines carrying crude oil were sabotaged this weekend, the Syrian Petroleum and Mineral Resources Ministry said, as reported by state news agency SANA.

The ministry said a leak from the pipelines was discovered on Saturday and divers carried out an inspection to find out that not one but five pipelines had been damaged. The damage done, however, must not have been extensive, because the ministry also said repairs have started immediately and the pipelines would return to normal operation in hours.

A later statement by the Minister of Petroleum and Mineral Resources, Ali Ghanem, said that six pipelines had been vandalized. The network carries crude oil from the coast to tankers at the port of Banias. The port city houses one of Syria’s two refineries. The other is located in Homs, in central Syria.

Last month U.S.-led forces blew up three oil tankers in Syria in the latest push against the Syrian government which is fighting rebel groups in their last remaining stronghold in Syria, in Idlib.

Syria is heavily dependent on crude oil imports through the Mediterranean, with a lot of the oil coming from Iran. Before the civil war broke out in 2011, the country produced some 350,000 bpd, the AP reports, while now production averages some 24,000 bpd, while consumption is about 136,000 bpd.

U.S. sanctions against Syria and Iran have affected supply gravely, however, with a series of fuel shortages resulting from the U.S. and European sanctions against Syria and the U.S. sanctions on Iran that have caused a squeeze in Iran’s shipments abroad. According to Kpler data, Iran’s crude oil loading over the first half of June averaged 645,000 bpd, but most of this did not end up at an importing country’s ports: according to the data provider, some 82 percent of the oil is still floating in the Persian Gulf.

By Irina Slav for
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What's behind the seizure of the Iranian oil tanker in Gibraltar?
Iran condemned 'illegal' seizure of oil tanker in Gibraltar and demanded its immediate release.

05 Jul 2019 17:58 GMT Iran, Middle East, War & Conflict, Spain, United States

An Iranian oil tanker is at the centre of a growing international dispute.

British marines boarded and seized the ship on Thursday as it was sailing near Gibraltar, a British territory on Spain's south coast.

The UK believes it was violating European Union sanctions by carrying Iranian oil to Syria.

Spain said it was the United States that ordered the vessel be stopped.

Iran condemned what it called an illegal interception.

So what's behind this dramatic move? And as tension increases between the US and Iran, is Europe caught between a rock and a hard place?

Presenter: Imran Khan


Hassan Ahmadian - Assistant professor of political science at the University of Tehran

Ali Fathollah-Nejad - Visiting fellow at the Brookings Doha Center

Jeff Stacey - Former US State Department official under President Barack Obama

Source: Al Jazeera News
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🛢️ Persian Gulf Conflict Could Send Oil Beyond $325
« Reply #3 on: July 08, 2019, 10:27:06 AM »
Let's see...

$325/bl is roughly 6X the current price of oil.  So what does that bring the price of gas up to?  Well, part of the cost of gas is in the refining and the transportation, so gas wouldn't go up by 6X.  I think you could safely say though it would triple cost at the pump.  Currently here on the Last Great Frontier, we're paying $3/gal.  So you come up witha ballpark figure of $9/gal.

Now, what typical commuter could afford his transportation fuel cost going up by 300%?  What trucking company could handle the cost of Diesel tripling?

Answer:  About none of them.

If the Iranians do in fact shut down the Straights of Hormuz, rationing will have to begin virtually immediately.  Even with rationing though, there would be definite shortages.


Persian Gulf Conflict Could Send Oil Beyond $325
By Vincent Lauerman - Jul 07, 2019, 6:00 PM CDT

The possibility of Iran attempting to close the Strait of Hormuz to tanker traffic has increased significantly in recent weeks, as has the possibility of a Persian Gulf War, especially with the Islamic Republics’ intentional destruction of a U.S. surveillance drone on June 20.

This act provides weight to Tehran’s threat that it will inflict a heavy toll on U.S. allies in the region if attacked by American forces and will not allow these same countries to export their oil if it can’t export its own.

The memory remains remarkably fresh in Iran of the 1951-53 oil embargo that toppled the democratically-elected government of Prime Minister Mohammed Mossadegh – and the CIA installing the despot Mohammad Reza Pahlavi, the so-called Shah of Iran, in his place.

The impact on oil markets of an Iranian closure of the Strait of Hormuz would be enormous.

Strait of Hormuz Closure

The leadership of the Iranian Navy and the Revolutionary Guard Navy, knowing they could never challenge the U.S. in a conventional naval contest, have been accumulating considerable asymmetric and other capabilities to enable the Islamic Republic to close the Strait of Hormuz since the “tanker war” in the Persian Gulf during the 1980-88 Iran-Iraq War.

These capabilities include thousands of sea mines, torpedoes, advanced cruise missiles, regular-sized and mini-submarines, and a flotilla of small fast-attack boats, most of which are concentrated in the strait region.
Related: Oil Prices Set For Worst Weekly Drop In Five Weeks

Pentagon planners believe Iran would use all of these capabilities in an integrated fashion to both disrupt maritime traffic in the Strait of Hormuz and attempt to deny American and allied forces access to the region. Iranian naval forces are viewed as a “credible threat” to international shipping in the strait.

When commanding CENTCOM between 2010 and 2013, former Secretary of Defense Jim Mattis developed a multinational plan to minimize disruptions to maritime traffic in the Strait of Hormuz by preventing Iranian efforts to lay mines and systematically clear mines that have been deployed. The focus on mines was due to the assumption that they were the major means to hinder traffic as it is difficult to sink a modern double-hull oil tanker by torpedo or missile attack. A primary goal of the plan is to create ever-larger safe passages through minefields to allow movement of oil tankers to return to pre-crisis levels as quickly as possible.

There is a consensus among U.S. military planners that American and allied forces would ultimately prevail over Iran if it attempted to close the Strait of Hormuz. The most optimistic planners believe U.S.-led forces could reopen the straight within a few days, whereas the least optimistic ones believe it could take up to three months to restore maritime traffic to normal levels.

Of course, hostilities could spread from the Strait of Hormuz to elsewhere in the Persian Gulf region – and a regional war could break out even without Iran first closing the strait – in which case oil and gas production and export infrastructure would suffer significant damage.

If attacked by U.S. and allied forces, or if it believes an attack is imminent, Tehran may choose to launch airstrikes and missiles on American military forces and regional allies such as Saudi Arabia and the UAE while it still has the capability to do so. This ‘use them before you lose them’ strategy would largely be based on Saddam Hussein’s experience in Iraq.

Three Scenarios

The impact of a closure of the Strait of Hormuz on global crude prices obviously depends on the amount of oil kept off the world market on a daily basis and the duration of the disruption. Based on the discussion in the previous section, we explore two scenarios that relate directly to the Strait of Hormuz, and a third one that includes a Persian Gulf War.

In the Optimistic Scenario, where the Strait of Hormuz is only closed to commercial traffic for a few days, the impact on global oil supplies would be relatively minimal, but we would still see a brief spike above $100 per barrel due to the initial uncertainty surrounding its outcome. Crude prices would then quickly fall back to pre-crisis levels.

The flow of 20.7 million b/d of crude and petroleum product would be curtailed if the Strait of Hormuz is fully closed, but this would be mitigated by almost 4 million b/d of crude being shipped on currently spare pipeline capacity across Saudi Arabia to Red Sea export facilities and the Abu Dhabi Crude Oil Pipeline bypassing the Strait of Hormuz.

In addition, Saudi Arabia has stored an undisclosed, albeit relatively small amount of crude oil in a number of storage facilities around the world, including Rotterdam in Europe, Okinawa and China in Asia, and the U.S. Gulf Coast.

Under the Pessimistic Scenario, the world’s oil emergency response system would be taxed to its maximum in the first two months of the crisis – assuming the Strait of Hormuz is fully closed for the first 45 days, and a straight line resumption in oil tanker traffic over the next 45 days – leading to historically high crude oil prices on an inflation-adjusted basis for an extended period.

Global strategic oil reserves would be more than enough to cover the shortfall in an overall sense, with 40 percent of the 1.9-billion-barrel total remaining post-crisis, but the rate of daily withdrawal from strategic reserves would pose a challenge.

Previous studies suggest that a maximum of 14.4 million b/d of crude and product could be released from the International Energy Agency (IEA) member country reserves in the first month and roughly 12.5 million b/d in the second month, compared to disruptions of 16.9 million b/d and 15.5 million b/d, respectively, based on our assumptions.
Related: The Real Reason Why ExxonMobil Won’t Go Ahead With $53 Billion Iraqi Megaproject

China and India now account for about a fifth of global strategic reserves, and releases from their reserves would contribute to the IEA efforts – whereas commercial inventories around the world now tend to run on a just-in-time basis.

Based on an April 2018 study by the Riyadh-based King Abdullah Petroleum Studies and Research Center (KAPSARC), in a world without spare crude capacity – which in effect would be the case with the Strait of Hormuz closed – oil prices would have spiked above $325 per barrel at the height of the Libyan Crisis in June 2011. For the sake of scale, a mere 60 million barrels were released from IEA country stockpiles during that crisis.

Finally, in a Doomsday Scenario, where there is significant damage to Persian Gulf oil-producing and export infrastructure as well as a three-month closure of the Strait of Hormuz, crude oil prices would rocket into the stratosphere. They would not begin to fall back until the global economy collapses into deep recession. A direct hit on Saudi Aramco’s Abqaiq oil processing facility alone could deprive the world market of 7 million b/d for a year or more as the plant is repaired.

The impact of this and other Persian Gulf production losses could be mitigated somewhat by the remaining 40 percent of the world’s strategic reserves, as well as 200 million b/d of crude that Saudi Arabia holds in reserve at home assuming Saudi export facilities remain relatively intact.

By Vincent Lauerman for
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Iran warning: Oil price fears as tension mounts - ‘There could be consequences

Iran warning: Oil price fears as tension mounts - ‘There could be consequences’

RISING tensions in the Gulf could push oil prices up, with last month’s incidents in which Iran was blamed for attacks on Saudi oil tankers triggering an instant ten percent jump in insurance premiums for vessels passing through the hazardous Strait of Hormuz, a new analysis has warned.

PUBLISHED: 20:46, Tue, Jul 30, 2019 | UPDATED: 21:27, Tue, Jul 30, 2019

The potentially explosive situation in the region has been in the spotlight in recent days, especially since the seized the UK-flagged Stena Imperio last Saturday (July 19) and took it to the port of after claiming it had been involved in a collision with a fishing vessel - a move then-Foreign Secretary described as “unacceptable”. Prior to this, the attacks on the two Saudi tankers were damaged by explosions in the Gulf of Oman, with Iran widely suspected of being behind the incidents despite Tehran’s emphatic denials.

The report, entitled Strait of Hormuz and published by data specialists , underlines the potential knock-on effect which a sustained period of instability could have on world markets.

Prepared by Giorgios Beliers, Refinitiv’s Oil Research Manager for the Middle East and North Africa, and Ranjith Raja, it stated: “After the incidents in June, insurance premiums for ships passing the Strait of Hormuz jumped 10 percent overnight.

“The additional war risk premiums for ships calling the gulf have been quoted to be in the range of $100,000 for a VLCC on a seven-day passage in the region.”

If maritime operators became more cautious about placing their ships in the region, there “could be consequences” for fuel oil markets such as the Fujairah bunker, referring to the huge port in the United Arab Emirates where huge oil reserves are stored.

Stena Impero

The Stena Impero - and an Iranian Revolutionary Guard gunboat - at Bandar Abbas (Image: GETTY)

The report added: “The spread between the Fujairah and Singapore bunkers had widened to a near $45 US dollar discount compared with Singapore following the incident.”

Weekly bunker loadings from Fujairah storage since the June attacks on the tankers had dropped significantly to an average of 108,950 metric tonnes (MT), compared to the year-to-date (YTD) weekly average prior to June, which stood at 150,125 MT.

The report said: “Refinitiv Oil research also monitors the bunker barge activities in Fujairah, which have dropped to about 17 barge loadings/week since June compared to 23 barge loadings/week for the year prior to June.

“Aside from short-term volatility, there’s been a muted response in terms of the movement of crude oil prices.


Iranian Revolutionary Guards

A video still shows Iranian Revolutionary Guards preparing to board the Stena Impero (Image: GETTY)

“Although crude supplies from the Gulf have declined sharply from a year ago, the impact on oil market fundamentals is already priced in, especially as OPEC is in a mode of maintaining its supplies in check, following the roll-over of the production cut agreement.”

The ongoing deadlock was clearly having an impact on Iran itself, the report’s authors stressed, explaining: “Iran has already lost significant volumes of exports due to the imposition of US sanctions reducing trade from almost 2.5 million barrels a day last spring to fewer than 500,000 barrels a day in recent months.

“Additionally, oil market participants are primarily focused on the demand-side impact of a slowing global economy and the US-China trade war.”

Nevertheless, the report concluded: “The possibility that security measures result in bottlenecks of vessels crossing the could also slow down the flow of oil towards final buyers, creating an artificial supply shock.

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🛢️ Iran seizes oil tanker near Farsi Island in the Persian Gulf
« Reply #5 on: August 06, 2019, 01:24:33 AM »
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🛢️ China’s Iranian Oil Weapon
« Reply #6 on: August 10, 2019, 03:21:17 PM »

China’s Iranian Oil Weapon

By ZeroHedge - Aug 10, 2019, 12:00 PM CDT

Two reports out this week worth paying attention to which could greatly impact oil prices at a crucial moment in which leaders in Tehran are desperately urging China to purchase more Iranian crude:

First, Reuters notes China continued importing Iranian oil in July for the second month since a US sanctions waiver ended, though at greatly diminished levels compared to the year prior, citing numbers from three data firms:

According to the firms, which track tanker movements, between 4.4 million and 11 million barrels of Iranian crude were discharged into China last month, or 142,000 to 360,000 barrels per day (bpd). The upper end of that range would mean July imports still added up to close to half of their year-earlier level despite sanctions.

And second, this via CNBC early this week, Brent and WTI price could crash if China buys Iranian oil. Bank of America is warning oil prices could potentially crash by $30 a barrel if China ramps up Iranian crude purchases. Reverses Loss After China’s Stronger Yuan Fix

The report summarized:

Bank of America Merrill Lynch warns the oil price could slip sharply if China buys Iranian oil.

Beijing could undermine Washington’s foreign policy stance by ignoring U.S. sanctions placed on Iran.

BofA is keeping its $60 per barrel price estimate in place for 2020.

Currently the Trump administration puts Iran's oil exports at a range of 50-70 percent going to China, and with around 30 percent going to Syria.
Related: Energy Storage Boom Goes Into Overdrive

With the US and UK now aggressively choking the Tehran to Damascus trade, given last month's UK Royal Marine intercept of the Grace 1 tanker off Gibraltar, Tehran's economic survival is ever more dependent on selling to China - a country powerful enough to bust US sanctions.

Last week Iran's Vice President Jahangiri made a direct appeal to Beijing and "friendly" countries to up their Iranian crude purchases in statements made during a Chinese diplomatic delegation visit.

“Even though we are aware that friendly countries such as China are facing some restrictions, we expect them to be more active in buying Iranian oil,” Jahangiri reportedly told visiting senior Chinese diplomat Song Tao.

Meanwhile, figures just prior to ending the waiver program:

You will find more infographics at Statista

China's crude imports from Iran have been plunging this summer, sinking almost 60 percent in June compared to a year earlier. But Beijing could unleash severe oil volatility on global markets if it decides to reverse course; the General Administration of Chinese Customs is set to publish exact details of July imports by origin in the last week of August.

This also as the Chinese Ministry of Commerce threatened countermeasures in response to Trump's fresh threats of a 10 percent tariff on $300 billion dollars of Chinese goods made a week ago.

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🛢️ China Prepares Its “Nuclear Option” In Trade War
« Reply #7 on: August 14, 2019, 05:44:24 AM »

China Prepares Its “Nuclear Option” In Trade War
By Simon Watkins - Aug 13, 2019, 6:00 PM CDT

As the trade war with the U.S. continues to escalate, China has re-engaged with Iran on three key projects and is weighing the use of what both Washington and Beijing term the ‘nuclear option’, a senior oil and gas industry source who works closely with Iran’s Petroleum Ministry told last week.

For the first of these projects - Phase 11 of the supergiant South Pars non-associated gas field (SP11) - last week saw a statement from the chief executive officer of the Pars Oil and Gas Company (POGC) that talks had resumed with Chinese developers to advance the project. Originally the subject of an extensive contract signed by France’s Total before it pulled out due to re-imposed U.S. sanctions on Iran, talks had been well-advanced with the China National Petroleum Corporation (CNPC) to take up the slack on development. As per the original contract, CNPC had been assigned Total’s 50.1 percent stake in the field when the French firm withdrew, giving it a total of 80.1 percent in the site, with Iran’s own Petropars Company holding the remainder. At the same time, Iran was desperate to increase the pace of development of the fields in its oil-rich West Karoun area, including North Azadegan, South Azadegan, North Yaran, South Yaran, and Yadavaran, in order to optimise oil flows ahead of further clampdowns on exports by the U.S.

China, though, which at that time was engaged in just the opening shots of the trade war with the U.S. was loathe to completely disregard all U.S. sensibilities when it came to Iran but equally saw itself as a longstanding partner of the Islamic Republic, not to mention always being cognisant of its need to ensure diversity of energy supply. At that point, China agreed a trade-off with the U.S. that in exchange for it halting active development of SP11 it would be allowed to continue its activities in North Azadegan and would be able to go ahead with its development of Yadavaran – the second of China’s major Iran projects. China told the U.S. that its continued involvement in North Azadegan could easily be justified to anyone else who might be interested – such as the mainstream media – on the basis that it had already spent billions of dollars developing the second phase of the 460 square kilometre field. Similarly, China said at the time, its ongoing activities on Yadavaran could be justified by dint of the fact that the original contract had been signed in good faith in 2007, way before the U.S. withdrawal from the nuclear deal in May 2018 and thus, legally speaking, it had every right to go ahead.
Related: Will Shale Rise From The Dead?

The third of China’s major as yet unfinished projects in Iran was the build-out of the Jask oil export terminal, which – crucially, particularly in the current security situation – does not lie within the Strait of Hormuz or even in the Persian Gulf, but rather in the Gulf Of Oman. Even before the new U.S. sanctions, the Kharg export terminal was not ideal for use by tankers as the narrowness of the Strait of Hormuz means that they have to go very slowly through it. With the new sanctions in place and tit-for-tat tanker seizures regularly occurring, China would have little choice but to put at least a couple of its own warships into the Gulf to safeguard their passage or stop buying Iranian oil entirely, neither of which Beijing particularly wants to do.

So, according to the plans, a US$2 billion or so 1,000 kilometre oil pipeline will connect Guriyeh in the Shoaybiyeh-ye Gharbi Rural District, in Khuzestan Province (south-west Iran), to Jask County, in Hormozgan Province (south Iran), with any financing required over and above that provided for Iran to be made readily available  from China. Also to be constructed in Jask is an initial 20 storage tanks each capable of storing 500,000 barrels of oil, and related shipping facilities, at a cost of around US$200 million. Overall, the intention is for Jask to have the capacity to store up to 30 million barrels and export one million barrels per day of crude oil. There are adjunct plans to build a large petrochemicals and refining complex in Jask as well, with the prime market for produced petchems – including gasoline, gas oil, jet fuel, sulphur, butadiene, ethylene and propylene, and mono-ethylene glycol - again being China. According to a recent comment by the director of projects at Iran’s National Petrochemical Company, Ali Mohammad Bossaqzadeh, the project would be built and run by Bakhtar Petrochemicals Holding, although ‘other foreign companies’ may take part. In fact, according to the Iran source, China has also offered to send as many engineers and other professionals required in such a project to Iran for as long as necessary.

Having said that, and aware of the leverage that it had with Iran as one of the very few countries still willing to engage in developing its fields in the midst of increasingly vigorously-imposed sanctions, China has sought deal sweeteners from Iran, and has been given them. In order for it to reactivate its development of SP11, China will get a 17.25 percent discount for nine years on the value of all gas it recovers. “This is the value of the gas as applied to CNPC’s cost-return formula against the open market valuation, and currently the net present value of the site is US$116 billion,” the Iran source told For its part, China has agreed to increase the production from its oil fields in the West Karoun area – including North Azadegan and Yadavaran - by an additional 500,000 bpd by the end of 2020. This dovetails with Iran’s plan to increase the recovery rate from these West Karoun fields that it shares with Iraq from the current 5 percent (compared to Saudi Arabia’s 50 percent). “For every one percent increase, the recoverable reserves figure would increase by 670 million barrels, or around US$34 billion in revenues with oil even at US$50 a barrel,” the Iran source said.

If there is any further pushback from the U.S. on any of these Chinese projects in Iran, then Beijing will invoke in full force the ‘nuclear option’ of selling all or a significant part of its US$1.4 trillion holding of U.S. Treasury Bills, with a major chunk of the paper due to be sold in September on this basis. This massive holding of these bonds - through which the U.S. finances its economy and is an important factor both in the value of the dollar and therefore in the health of U.S. international companies especially – has been used as a bargaining chip before by China, especially when it feels threatened. Back in 2007, just before the great financial crisis, a number of senior Chinese figures at various state-run think tanks – through which China often signals its big geopolitical threats – stated that the large-scale selling of this massive Treasury Bill holding would trigger a dollar crash, a huge spike in bond yields, the collapse of the housing market and stock market chaos.
Related: The Revival Of A $53 Billion Megaproject

Such a tactic would neatly fit into China’s overall strategy to have the renminbi challenge the U.S. dollar’s status as the key global reserve currency and the prime currency for global energy transactions. “The long-planned sequencing for this was inclusion in the SDR {Special Drawing Rights] mix, which happened in 2016, increasing use as a trading currency, which followed that, use as the key currency of an international energy trading exchange, which has occurred with the creation of the renminbi-denominated Shanghai International Energy Exchange in last year, and the calls from big oil producers and other major trading nations to use the renminbi, which has been happening over the past few years,” the head of a New York-based commodities hedge fund told Only recently, Leonid Mikhelson, chief executive officer of Russian oil major, Novatek, said that future sales to China denominated in renminbi is under consideration and that U.S. sanctions accelerate the process of Russia trying to switch away from U.S. dollar-centric oil and gas trading and the damage from potential sanctions that go with it. “This has been discussed for a while with Russia’s largest trading partners such as India and China, and even Arab countries are starting to think about it... If they do create difficulties for our Russian banks then all we have to do is replace dollars,” he said. “The trade war between the U.S. and China will only accelerate the process,” he added.

The trade war with the U.S., though, may be the very reason why this policy is not being pushed right now by China, Rory Green, Asia economist for TS Lombard told last week. “With the renminbi weakening, and set to reach 7.50 to the [U.S.] dollar level if the U.S. imposes 25 percent tariffs on all Chinese exports, it is more difficult for China to persuade the big oil producers like Russia, Iran, Iraq, Venezuela, to make the switch away from the dollar,” he said. “For China as well, the timing is not quite right, as its use of Eurodollar financing is currently significant, it has a lot of dollar-denominated bonds rolling over shortly, and its balance of payments needs a relatively healthy U.S. demand profile, but China wants to get away from the dollar system and that is the overall direction of travel,” he concluded.

By Simon Watkins for
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🛢️ U.S. warrant issued for seizure of Iranian oil tanker in Gibraltar
« Reply #8 on: August 17, 2019, 12:02:55 AM »

August 16, 2019 / 2:47 PM / Updated 3 hours ago
U.S. warrant issued for seizure of Iranian oil tanker in Gibraltar

Iranian oil tanker Grace 1 sits anchored awaiting a court ruling on whether it can be freed after it was seized in July by British Royal Marines off the coast of the British Mediterranean territory, in the Strait of Gibraltar, southern Spain, August 15, 2019. REUTERS/Jon Nazca

WASHINGTON (Reuters) - A U.S. court has issued a warrant for the seizure of an Iranian tanker that British Royal Marines had seized last month in Gibraltar, a court document showed on Friday.

The oil tanker Grace 1, the more than 2 million barrels of oil it carries and $995,000 are subject to forfeiture based on a complaint by the U.S. government, U.S. Attorney for the District of Columbia Jessie Liu said in a news release.

The tanker was seized by British Royal Marines at the western mouth of the Mediterranean on July 4 on suspicion of violating European Union sanctions by taking oil to Syria, a close ally of Iran.

Washington had attempted to detain the Grace 1 on the grounds that it had links to Iran’s Islamic Revolutionary Guard Corps (IRGC), which it has designated a terrorist organization.

“The scheme involves multiple parties affiliated with the IRGC and furthered by the deceptive voyages of the Grace 1,” Liu said. “A network of front companies allegedly laundered millions of dollars in support of such shipments.”

“A seizure warrant and a forfeiture complaint are merely allegations. The burden to prove forfeitability in a civil forfeiture proceeding is upon the government,” the news release said.


Gibraltar lifted the tanker’s detention order on Thursday but the vessel’s fate was further complicated by a last-ditch U.S. legal appeal to hold it.

The tanker shifted its position on Friday, but its anchor was still down off Gibraltar and it was unclear if it was ready to set sail soon.

The warrant for the seizure of the tanker, which carries 2.1 million barrels of oil, was issued by the U.S. District Court for the District of Columbia and addressed to “the United States Marshal’s Service and/or any other duly authorized law enforcement officer.”

Reporting by Mohammad Zargham; Editing by Leslie Adler
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Iranian supertanker US tried to seize moves toward unknown destination

By Frank Miles | Fox News

<a href="" target="_blank" class="new_win"></a>

Iran warns presence of US, allies could spark war in Persian Gulf

Iran officials are pointing the finger at the U.S. and its allies for creating a 'matchbox' in the Persian Gulf.

Amid a growing confrontation between Iran and the West a year after President Trump pulled Washington out of Tehran’s nuclear deal with world powers, an Iranian supertanker the U.S. has suspected to be tied to a sanctioned organization has lifted its anchor and started moving away from Gibraltar, marine traffic monitoring data showed late Sunday.

The trail left by GPS data on, a vessel-tracking service, showed the Iran-flagged Adrian Darya 1, previously known as Grace 1, moving shortly before midnight. The tanker slowly moved southeast toward a narrow stretch of international waters separating Morocco and the southern tip of the Iberian Peninsula.

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The vessel hauling $130 million worth of light crude oil had been detained for a month in the British overseas territory for allegedly attempting to breach European Union sanctions on Syria. Gibraltar rejected an eleventh-hour attempt by the United States to reseize the oil tanker on Sunday, arguing that EU regulations were less strict than U.S. sanctions on Iran.

The vessel’s next destination was not immediately known.

An on-duty officer at the Port Authority of Gibraltar declined to comment to The Associated Press on the ship’s moves and deferred questions to the government. The Gibraltar government press office did not immediately respond to AP messages seeking comment.

Iran’s ambassador to Britain, Hamid Baeidinejad, had announced earlier on Twitter that the ship was expected to leave Sunday night.

Shortly after the tanker’s detention in early July near Gibraltar, Iran seized the British-flagged oil tanker Stena Impero, which the Islamic Republic has continued to hold.

Gibraltar’s government said Sunday it was allowing the Iranian tanker’s release because “the EU sanctions regime against Iran - which is applicable in Gibraltar - is much narrower than that applicable in the US.”

In a last-ditch effort to stop the release, the U.S. unsealed a warrant Friday to seize the vessel and its cargo of 2.1 million barrels of light crude oil, citing violations of U.S. sanctions as well as money laundering and terrorism statutes.
New warnings Iran may be interfering with GPS on commercial ships in Strait of Hormuz, Gulf watersVideo

U.S. officials told reporters that the oil aboard the ship was worth some $130 million and that it was destined for a designated terror organization.

The unsealed court documents argued that Iran’s Islamic Revolutionary Guard Corps was the ship’s true owner through a network of front companies.

Authorities in Gibraltar said Sunday that, unlike in the U.S., Iran’s Revolutionary Guard was not designated a terrorist organization under EU, U.K. or Gibraltar law.

Iran has not disclosed the Adrian Darya 1′s intended destination and has denied it was ever headed for Syria.

The chief minister of Gibraltar, Fabian Picardo, said he had been assured in writing by the Iranian government that the tanker wouldn’t unload its cargo in Syria.
Iran seizes oil tanker near Farsi Island in the Persian GulfVideo

The Astralship shipping agency in Gibraltar, which has been hired to handle paperwork and arrange logistics for the Adrian Darya 1, had told The Associated Press that a new crew of Indian and Ukrainian nationals had been expected to replace the sailors on board.

Messages seeking comment from the Iranian Embassy in London were not immediately returned.

The Associated Press contributed to this report.
Frank Miles is a reporter and editor covering geopolitics, military, crime, technology and sports for His email is
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🛢️ Greece says has had no request from Iranian oil tanker to dock
« Reply #10 on: August 20, 2019, 06:47:49 AM »

World News
August 20, 2019 / 2:48 AM / Updated 3 hours ago
Greece says has had no request from Iranian oil tanker to dock

ATHENS (Reuters) - Greece said on Tuesday it had not had a request for an oil tanker at the center of a row between Iran and the U.S. to dock at one of its ports, as Washington warned Greece against helping the vessel.

A crew member raises the Iranian flag on Iranian oil tanker Adrian Darya 1, previously named Grace 1, as it sits anchored after the Supreme Court of the British territory lifted its detention order, in the Strait of Gibraltar, Spain, August 18, 2019. REUTERS/Jon Nazca

The Adrian Darya 1 — formerly the Grace 1 — left Gibraltar on Aug 18. Ship-tracking data on Tuesday showed the vessel was heading towards the Greek port of Kalamata on the southern coast of the Peloponnese and was scheduled to arrive on Aug. 26.

“The vessel is cruising at low speed and there is still no formal announcement that it will arrive at Kalamata. The Merchant Marine Ministry is monitoring the matter along with Greece’s Foreign Ministry,” a shipping ministry spokesman said.

The ship was released from detention off Gibraltar after a five-week standoff over whether it was carrying Iranian oil to Syria in violation of European Union sanctions.

Soon after the detention order was lifted, a U.S. federal court ordered the seizure of the vessel on different grounds, but that petition was rejected by Gibraltar.

Tehran said any U.S. move to seize the vessel again would have “heavy consequences”.

Earlier, the United States said it had conveyed its “strong position” to the Greek government over the tanker, which is carrying about 2 million barrels of oil.

The issue will be a major foreign policy test for Greek Prime Minister Kyriakos Mitsotakis, a pro-western conservative elected in July.

Any efforts to assist the tanker could be construed as providing material support to a U.S.-designated foreign terrorist organization, which has immigration and potential criminal consequences, a U.S. State Department official said.

A Greek diplomatic source cited by the state Athens News Agency said the country was in communication with the United States on the matter, but did not say what Greece would do.

“(The U.S.) position on the specific issue is known and has been communicated not only to Greece but other states and ports in the Mediterranean.”

It is standard practice for a vessel to give notice 48 hours before docking at a port, Greek officials said.

It was unclear where the ship might head if Greece refused it permission to dock. Cyprus, further east, has bitter experience from seizing Iranian products destined for Syria; munitions it confiscated exploded in 2011, causing the island’s worst peace-time disaster.

Washington wants the tanker detained on the grounds that it had links to Iran’s Islamic Revolutionary Guard Corps, which it has designated a terrorist organization.

European Union nations ban oil sales to Syria and the United States has sanctions on Iranian oil sales.

Reporting by Michele Kambas and George Georgiopoulos; editing by John Stonestreet
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🛢️ World watching the fate of Iranian tanker
« Reply #11 on: August 23, 2019, 03:09:03 AM »

Tanker wars Adrian Darya-1|Opinion
August 19, 2019
World watching the fate of Iranian tanker

By Vijay Prashad

At 11:30pm on Sunday, August 18, the Iranian tanker Adrian Darya-1 left the shores of Gibraltar at the mouth of the Mediterranean Sea. This ship had been detained about six weeks previous by British Royal Marines and Gibraltar officials. The British claimed that the ship, then named Grace 1, was taking its cargo of 2.1 million barrels of oil to Syria. There are European Union sanctions against trade with the Syrian government. It is based on these sanctions that the British seized the Iranian vessel.

Last Thursday, Gibraltar Chief Minister Fabian Picardo ordered the release of the ship after Iranian authorities said it would not be going to Syria. The immediate destination for Adrian Darya-1 is the Greek port of Kalamata.
Sanctions on Iran

The British, it is clear, seized the Iranian tanker at the urging of the United States. There was no previous British warning that it might venture in such a muscular way into the US attempt to suffocate Iran. Even the location of the seizure unnecessarily raised tensions for the United Kingdom. The waters around Gibraltar are contested between Britain and Spain, with the latter making noises about a formal complaint about the British action.

Gibraltar’s government has been trying to find a middle course between the claims of Britain and Spain. It seeks some form of independence, although with close ties with both its large neighbor and its formal occupant. When the UK asked Gibraltar’s authorities to get involved in the seizure of the Iranian tanker, Gibraltar’s government complied because the request was in line with European Union sanctions against trade with the Syrian government.

In Gibraltar’s courts, the British were largely silent. The case against the Iranian vessel was made by the United States, which changed the basis for the seizure. The US argued that the vessel had to remain impounded as part of its new and harsh sanctions regime against Iran. When Gibraltar was preparing to release the ship, the US District Court in Washington, DC, issued a warrant for the ship. This emergency warrant alleged that the ship was owned by the Iranian Revolutionary Guards and therefore must not be allowed to sail.

Gibraltar did not agree. The US tried to use its 1977 International Emergency Economic Powers Act, and the new sanctions regime by the Donald Trump administration. None of this appealed to the judiciary in Gibraltar. The government of Gibraltar said it did not accept the new US sanctions regime on Iran. It had held the vessel based on the European Union sanctions on Syria, not on any EU sanctions on Iran. Therefore, it has allowed Adrian Darya-1 to sail.
Iran’s reaction

New statistics show that Iran’s economy has been decelerating at a rapid pace. The numbers from the Statistical Center of Iran show that gross domestic product shrank by 4.9% in 2018-19. Economic growth is slipping backwards, as the oil, industry and agriculture sectors post negative numbers. The inflation rate now is at the highest it has been in a quarter of a century. Iranian traders have been moving their goods to Iraq, which results in the rise of prices within Iran.

Most stunningly, the prices of non-trade goods and services, such as health and housing, are rising. All this has put enormous pressure on the government of President Hassan Rouhani, although his spokesman Ali Rabiei said on Monday that Iran’s economy was experiencing “positive signs.”

Confidence from the Iranian government is remarkable. Officials in Tehran refuse to be cowed by the pressure from Washington. When the Adrian Darya-1 left Gibraltar, senior Iranian parliamentarian Alaeddin Boroujerdi said that its release was a result of “the revolutionary diplomacy of resistance.” He pointed to the seizure by Iran of the British ship Stena Impero, which continues to be detained in Iran. The British ship, Boroujerdi said, was being held for its violation of basic maritime rules in the Strait of Hormuz, while the seizure of the Iranian ship “was an act of piracy by England.”

Based on this assessment that the UK had indulged in piracy at the urging of the United States, Iran’s chief judge Ebrahim Raeisi said the release of Adrian Darya-1 was not sufficient. Compensation must be paid to Iran. What compensation will be demanded from the UK is not clear, and it is further unclear where Iran will formally raise the issue of compensation. Iranian diplomats say they might approach the United Nations based on the 1982 UN Convention on the Law of the Sea.
Will Greece hold the tanker?

Within the Trump administration there is appetite to block the passage of Adrian Darya-1 further, and make it a flashpoint toward war. That is what Trump’s adviser John Bolton indicated when Gibraltar held the ship. Make your move, he seemed to suggest to Tehran. Iran told the US through Swiss authorities that it must allow the ship free passage. If the Adrian Darya-1 is blocked, it would set a terrible precedent for international shipping.

When the tanker enters Kalamata, it will likely take on a new crew and then set its next destination. There is no indication as to what the ship will do with its 2.1 million barrels of crude oil. It is likely that it will unload its cargo on to another ship in international waters.

Last week, the US government asked Greece to contribute to its naval force in the Persian Gulf. Greece, with its new conservative prime minister, declined – as did France and Germany – to this new US initiative. The Greek government, led by Kyriakos Mitsotakis, is eager for a close relationship with Washington, but it is not willing to enter a frontal clash with Iran. Greece is already in a heated situation with Turkey. To rattle Iran would only further complicate Greece’s fragile dance in the Eastern Mediterranean.

Greece, unlike the US, has taken the position that Iran has “the right to develop nuclear technology for peaceful purposes alone.” This is Iran’s position. The United States, as Professor Seyed Mohammad Marandi told Tricontinental: Institute for Social Research, opposes even a peaceful nuclear project for Iran. This is why Trump walked out of the 2015 nuclear deal. This is precisely why the US has been putting immense pressure on Iranian shipping. And this is what led us to the story of the Adrian Darya-1.

This article was produced by Globetrotter, a project of the Independent Media Institute, which provided it to Asia Times.
Asia Times is not responsible for the opinions, facts or any media content presented by contributors. In case of abuse, click here to report.
IranUS sanctionsIndependent Media InstituteEU SanctionsStena ImperoGibraltar

Vijay Prashad

Vijay Prashad is an Indian historian, editor and journalist. He is a writing fellow and chief correspondent at Globetrotter, a project of the Independent Media Institute. He is the chief editor of LeftWord Books and the director of Tricontinental: Institute for Social Research. He has written more than 20 books, including The Darker Nations: A People’s History of the Third World, The Poorer Nations: A Possible History of the Global South, The Death of the Nation and the Future of the Arab Revolution, and Red Star Over the Third World. He writes regularly for Frontline, The Hindu, Newsclick, AlterNet and BirGün.
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Re: 🛢️ Oil Resource Wars
« Reply #12 on: September 13, 2019, 07:56:05 AM »

US Surpassed Saudi Arabia, Russia To Become World's Top Oil Exporter
I know exactly what you mean. Let me tell you why you’re here. You’re here because you know something. What you know you can’t explain, but you feel it. You’ve felt it your entire life, that there’s something wrong with the world.
You don’t know what it is but its there, like a splinter in your mind

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🛢️ Saudi Arabia oil facilities ablaze after drone strikes
« Reply #13 on: September 14, 2019, 07:33:39 AM »
I was wondering when they would get around to this...


Saudi Arabia oil facilities ablaze after drone strikes

    2 minutes ago

Abqaiq is the site of Aramco's largest oil processing plant

Drone attacks have set alight two major oil facilities run by the state-owned company Aramco in Saudi Arabia, state media say.

Footage showed a huge blaze at Abqaiq, site of Aramco's largest oil processing plant, while a second drone attack started fires in the Khurais oilfield.

The fires are now under control at both facilities, state media said.

A spokesman for the Iran-aligned Houthi group in Yemen said it had deployed 10 drones in the attacks.

The military spokesman, Yahya Sarea, told al-Masirah TV, which is owned by the Houthi movement and is based in Beirut, that further attacks could be expected in the future.

He said Saturday's attack was one of the biggest operations the Houthi forces had undertaken inside Saudi Arabia and was carried out in "co-operation with the honourable people inside the kingdom".

Saudi officials have not yet commented on who they think is behind the attacks.

"At 04:00 (01:00 GMT), the industrial security teams of Aramco started dealing with fires at two of its facilities in Abqaiq and Khurais as a result of... drones," the official Saudi Press Agency reported.

"The two fires have been controlled."

There have been no details on the damage but Agence France-Presse quoted interior ministry spokesman Mansour al-Turki as saying there were no casualties.

Abqaiq is about 60km (37 miles) south-west of Dhahran in Saudi Arabia's Eastern Province, while Khurais, some 200km further south-west, has the country's second largest oilfield.

Saudi security forces foiled an attempt by al-Qaeda to attack the Abqaiq facility with suicide bombers in 2006.
An attack method open to all

Jonathan Marcus, BBC defence and diplomatic correspondent

This latest attack underlines the strategic threat posed by the Houthis to Saudi Arabia's oil installations.

The growing sophistication of the Houthis' drone operations is bound to renew the debate as to where this capability comes from. Have the Houthis simply weaponised commercial civilian drones or have they had significant assistance from Iran?

The Trump administration is likely to point the finger squarely at Tehran, but experts vary in the extent to which they think Iran is facilitating the drone campaign.

The Saudi Air Force has been pummelling targets in Yemen for years. Now the Houthis have a capable, if much more limited, ability to strike back. It shows that the era of armed drone operations being restricted to a handful of major nations is now over.

Drone technology - albeit of varying degrees of sophistication - is available to all; from the US to China, Israel and Iran... and from the Houthis to Hezbolllah.
Markets await news from key facilities

Analysis by BBC business correspondent Katie Prescott

Aramco ranks as the world's largest oil business and these facilities are significant.

The Khurais oilfield produces about 1% of the world's oil and Abqaiq is the company's largest facility - with the capacity to process 7% of the global supply. Even a brief or partial disruption could affect the company, and the oil supply, given their size.

But whether this will have an impact on the oil price come Monday will depend on just how extensive the damage is. Markets now have the weekend to digest information from Aramco and assess the long-term impact.

According to Richard Mallinson, geopolitical analyst at Energy Aspects, any reaction on Monday morning is likely to be muted, as markets are less worried about supply than demand at the moment, due to slower global economic growth and the ongoing trade war between the US and China.

However, there are concerns that escalating tensions in the region could pose a broader risk, potentially threatening the fifth of the world's oil supply that goes through the critical Strait of Hormuz.
Who are the Houthis?

The Iran-aligned Houthi rebel movement has been fighting the Yemeni government and a Saudi-led coalition.

Yemen has been at war since 2015, when President Abdrabbuh Mansour Hadi was forced to flee the capital Sanaa by the Houthis. Saudi Arabia backs President Hadi, and has led a coalition of regional countries against the rebels.

    Yemen conflict explained in 400 words
    Why is there a war in Yemen?
    Yemen war: Has anything been achieved?

The coalition launches air strikes almost every day, while the Houthis often fire missiles into Saudi Arabia.

Mr Sarea, the Houthi group's military spokesman, told al-Masirah that operations against Saudi targets would "only grow wider and will be more painful than before, so long as their aggression and blockade continues".
Image copyright EPA
Image caption Saudi-led coalition air strikes regularly target Houthis in Yemen

Houthi fighters were blamed for drone attacks on the Shaybah natural gas liquefaction facility last month and on other oil facilities in May.

There have been other sources of tension in the region, often stemming from the rivalry between Saudi Arabia and Iran.

Saudi Arabia and the US both blamed Iran for attacks in the Gulf on two oil tankers in June and July, allegations Tehran denied.

    Gulf of Oman tanker attacks: What we know
    Iran-US tensions: What's going on?

In May, four tankers, two of them Saudi-flagged, were damaged by explosions within the UAE's territorial waters in the Gulf of Oman.

Saudi Arabia and then US National Security Adviser John Bolton blamed Iran. Tehran said the accusations were "ridiculous".

Tension in the vital shipping lanes worsened when Iran shot down a US surveillance drone over the Strait of Hormuz in June, leading a month later to the Pentagon announcing the deployment of US troops to Saudi Arabia.
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That should bump up the oil prices.


Saudi Arabia reportedly shuts down half its oil production after drone attack
Published 3 hours agoUpdated an hour ago
Yun Li   @YunLi626

Fires burn in the distance after a drone strike by Yemen’s Iran-aligned Houthi group on Saudi company Aramco’s oil processing facilities, in Buqayq, Saudi Arabia September 14, 2019 in this still image taken from a social media video obtained by REUTERS
Key Points

    The closure will impact almost five million barrels of crude production a day, about 5% of the world’s daily oil production, the WSJ reported.
    Early Saturday, an oilfield operated by Saudi Aramco, the state-owned oil giant, was attacked by a number of drones.
    Yemen’s Houthi rebels have claimed responsibility for the attack, saying it was one of their largest attacks ever inside the kingdom, the WSJ reported.

Saudi Arabia is shutting down half of its oil production after drones attacked the world’s largest oil processing facility in the kingdom, The Wall Street Journal reported.

The closure will impact almost five million barrels of crude production a day, about 5% of the world’s daily oil production, the WSJ reported, citing sources familiar with the matter.

Early Saturday, an oilfield operated by Saudi Aramco, the state-owned oil giant, was attacked by a number of drones, which sparked a huge fire at a processor crucial to global energy supplies.

Yemen’s Houthi rebels have claimed responsibility for the attack, saying it was one of their largest attacks ever inside the kingdom, the WSJ reported.

“We promise the Saudi regime that our future operations will expand and be more painful as long as its aggression and siege continue,” a Houthi spokesman said. The attack involved 10 drones, the Houthis said.

The Saudi interior ministry said the fires were under control.

Saudi officials are considering drawing down their oil stocks to sell to foreign buyers to make sure world oil supplies won’t be disrupted by the attack and shutdown, the WSJ reported.

The Iran-backed Houthis had been behind a series of attacks on Saudi pipelines, tankers and other infrastructure in the past few years as tensions rise among Iran and the U.S. and partners like Saudi Arabia.

The Islamic Republic, a target of U.S. sanctions for decades, has recently attacked oil tankers in the Strait of Hormuz, shot down a U.S. military drone and announced plans to execute 17 suspected U.S. spies.

Saudi Arabia is moving forward to take Saudi Aramco public in a major shakeup of the kingdom’s energy sector. The world’s most profitable oil company is expected to be valued at more than $1.5 trillion, CNBC previously reported.  Crown Prince Mohammed bin Salman has pushed for a valuation of as much as $2 trillion.
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