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Is Iran Considering An Attack On Saudi Arabia?

By all accounts, major general Qasem Soleimani – commander of Iran’s Islamic Revolutionary Guards Corp (IRGC) crack ‘Quds’ force that is responsible for foreign military and clandestine operations – is a man of the highest intellect. Instrumental in numerous effective campaigns against Iraq, the Islamic State and in Syria, to name but a few, he has also played a key role in advancing Iran’s political power across the Shia crescent of influence stretching from Syria through Lebanon, Jordan, Iraq, Iran itself, and Yemen. Even if the person effectively in charge of all of Iran’s key military and geopolitical decisions right now was nowhere near as clever as Soleimani, would they not already have worked out that attacking Saudi Arabia’s oil and gas infrastructure has virtually no downside for Iran - but lots of upside - and be thinking ‘what about launching some fresh attacks’?

According to senior Iranian sources spoken to by OilPrice.com last week, this question has been the focus of high-level military discussions in Iran since the aerial attacks on Saudi Arabia’s Abqaiq and Khurais facilities last month. Immediately, these attacks – either done alone by Houthi rebels from Yemen or assisted by Iran, depending on what version is believed – led to the temporary suspension of 5.7 million barrels per day (bpd) of oil production. This equates to well over half of Saudi Arabia’s actual crude oil production capacity, not a capacity figure that Saudi has plucked out of nowhere for geopolitical power purposes in recent years. It resulted in the corollary rise in world oil prices by the largest percentage in a single day ever. This was clearly very good news indeed for Iran.

The longer-term effects were also good for Iran either directly or indirectly. “Due to [U.S. President Donald] Trump’s statements on the subjects of ‘increased isolationism going forward’ and ‘America First’ and then the sacking of [former National Security Advisor and ultra-Iran hawk, John] Bolton it has become obvious to Soleimani that the U.S. has no wish to become involved in another military conflict in the Middle East, let alone with a country like Iran,” said a senior Iran source who works closely with its Petroleum Ministry. In fact, as OilPrice.com exclusively reported at the time, around the time of heightened tensions between the U.S. and Iran after the supposed Iran-led attacks on Saudi oil tankers there was a deep split in the U.S.’s senior Presidential Administration team over the course of action to take. Related: Iran’s Master Plan To Beat U.S. Sanctions

On the one hand, when Bolton still National Security Advisor, the U.S. was ’98 percent ready for war with Iran’, according to the Iran oil source, which meant moving at least 120,000 troops into position to augment the U.S.S Abraham Lincoln aircraft carrier group that was already in place. U.S. Vice President Mike Pence was also behind the military option, having earlier said: “The world missed an opportunity last time to confront the regime, but not this time.” On the other side, there were those that believed that because of the size of its military, its terrain, its leadership position in the Shia Arab world, and its absolute control over a multitude of military proxies – including Hezbollah and Hamas – not only would any invasion of Iran be doomed to failure (or at least an endless war) but also it would unleash a never-ending wave of terrorism around the globe.

Among those taking this view, OilPrice.com stated at the time, was Dan Coats, who left his position as Director of National Intelligence U.S. National Intelligence shortly after he testified to a Senate Committee prior to the withdrawal of the U.S from the Joint Comprehensive Plan of Action (JCPOA) deal that there was no indication that Iran was attempting to develop a nuclear weapon and that Tehran remained in compliance with the deal. Another was reportedly the CIA’s Head of Iran Mission Center, Michael D’Andrea, known as ‘the Dark Prince’ for his work in the U.S.’s sharp-end counter-terrorism operations after the ‘9/11’ attacks, and even the key figure in organising the elimination of one of Hezbollah’s leaders, Imad Mougniyeh, in Damascus, in 2008.

“Because of this split of opinion, a whole range of options have opened up for Soleimani, and at the top of the list is undermining Saudi Arabia from every angle possible,” said the Iran oil source. Soleimani is likely to benefit in this endeavor from the Saudi’s own now-legendary stupidity in dealing with the oil industry community. Saudi’s statements after the attacks on Abqaiq and Khurais were widely ridiculed, particularly over how much spare capacity it actually has and how long it would take to restore this. These were all forensically examined by OilPrice.com at the time but can be summarised by the words of a usually extremely diplomatic oil industry expert when he told OilPrice.com that: “It was extremely telling that he spoke of ‘capacity’ and later of ‘supply to the market’, as these are terms that Saudi tends to use in order to avoid talking about actual production, as capacity and supply are not the same thing at all as actual production at the wellheads,” he said. “The Saudi statements may not contain any direct falsehoods as such but nor are they entirely being fulsome with the truth,” he added.

Not only has the Saudi’s oil production capability been damaged by a much greater degree and for much longer than they admitted but also many seasoned oil industry experts know it was lying and not just this: it has created even further distance in the long-standing ‘deal’ between the U.S. and Saudi Arabia overpower for oil. This deal dates back to a meeting on 14 February 1945 between the then-U.S. President Franklin D. Roosevelt and the Saudi King at the time, Abdulaziz held onboard the U.S. Navy cruiser Quincy in the Great Bitter Lake segment of the Suez Canal. The deal they agreed, which has persisted ever since was this: the U.S. would get all of the oil supplies it needed for as long as Saudi had oil in place, in return for which the U.S. would guarantee the security both of the country and of the ruling House of Saud.

In recent years, though, there have been severe tests to the deal, beginning in 20114 when Saudi decided to try to destroy the then-nascent U.S. shale industry by pushing oil prices down through over-production to such a degree that the U.S. shale industry was bankrupted. As the Saudis were leading this strategy it understandably ended in complete disaster for Saudi and for all other OPEC members that followed it but the U.S. did not forget what it had tried to do. In more recent times, Saudi has become increasingly toxic for the U.S. given a slew of evil and/stupid deeds, including – but not limited to: the involvement of 15 Saudis out of the 19 terrorists behind the ‘9/11’ atrocity, the war in Yemen, the alienation of Qatar, the kidnapping of Lebanon’s then-President Saad Hariri and then forcing his resignation, and the murder of journalist Jamal Khashoggi. “Iran knows that literally the only things keeping the U.S. supporting the Saudis and not pulling out of there as well as it is doing with Syria is that Iraq is not yet ready to be a total substitute for the Saudi oil flows and nor is U.S. shale production,” said the Iran oil source. Related: Buffett’s Big Bet On Energy

There are other benefits for Iran from further attacks on Saudi as well, though. One is that the attacks caused strains in the increasingly uneasy relationship between the U.S. and its NATO partners. Various leading European politicians said at the time that the U.S. should not rush to believe that Iran was behind the attacks and Turkey’s President Recep Tayyip Erdogan did the same. This was quickly followed by the Turkish army rolling into northern Syria with the threat that it will annihilate the Kurdish population there – who it regards basically as terrorists – despite the U.S. having promised the Kurds (in Iraq, Iran, and Syria) a fully independent Kurdistan in exchange for the Kurdish Peshmerga army fighting Islamic State for the West on the ground. Another benefit for Iran – one that is truly rich in irony – is that the attacks on Saudi caused the Saudis to start to check oil prices for oil from other countries of a similar grade, including grades from Iraq. One of the most common ways that Iran has been side-stepping U.S. sanctions is to simply ‘rebrand’ its oil at the border with Iraq (or on ships) as ‘Iraqi oil’ with Iraq then selling it on and splitting the profits with Iran. In sum then, Saudi may well have ended up buying oil from Iran, just with the stickers changed on the barrels.

Given all of this, the Iran oil source told OilPrice.com last week, the IRGC since the attacks have been busily working away at modifying what was essentially 1969 missile technology from Russia to produce missiles with a much longer range than many medium-range missiles, that are extremely mobile as they can be launched from adapted lorries, and have a virtually real-time remote control handling system that makes them both incredibly difficult to shoot down and incredibly accurate. More specifically, according to various reports including the Iran oil source, Iran unveiled this new guidance system upgrade, called ‘Labeik’ only last week. This, according to a number of sources – including the highly authoritative ‘Jane’s Defence Weekly’, would be compatible with the Fateh-110 series of rockets, and with Zelzal heavy artillery rockets. “Soleimani is looking to roll these out not just in Yemen but also in other key strategic sites in Iraq, Lebanon, Syria, Sudan, and Somalia,” said the Iran oil source. “In order to support this, the IRGC was just given a 55 percent increase in the air defense budget,” he concluded.

By Simon Watkins for Oilprice.com

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Leave a comment
  • Joshua Snider on October 14 2019 said:
    Is it normal for countries to announce their plans to attack each other on the internet?
  • Mamdouh Salameh on October 15 2019 said:
    There is no need for Iran to consider an attack on Saudi Arabia having already won the strategic war in the whole Middle East without even firing a single shot in anger and having made the entire Saudi oil industry its hostage.

    Why consider a war against the Saudis when they have got the message that despite the huge and most modern weaponry they bought from the United States at exorbitant prices they are no match to Iran. The Saudis are starting to realize that it is better for them to cut their losses in Yemen and end the unwinnable war there and also start building bridges of trust with their archenemy Iran, hence the tentative steps Saudi Arabia has been taking towards that purpose.
    They are also starting to realize that staying in the US-Israel axis could lead to war with Iran and the destruction of their oil industry. Worst, they will end up paying for the war with their economy and the economies of the other Gulf States in tatters.

    Furthermore, the Saudis have also reached the conclusion that they can’t trust the word of their strategic ally the United States. A point of no return in the Saudi-American relations might have been reached when Iran’s allies, the Houthis of Yemen, attacked and inflicted heavy damage on Saudi oil infrastructure. The United States rushed to accuse Iran for the attacks but failed to retaliate against it. As a result, Saudi Arabia may have reached the conclusion that the United States has been using Iran as a threat to blackmail the Saudis for money and for striking lucrative weapon deals.

    Meanwhile, the States has now come to the conclusion that any retaliation against Iran even a symbolic one will mean war and this will mean in broader terms the end of US national interests in the whole Middle East, great risk that thousands of US troops deployed in Iraq and Syria could be taken hostages or killed. In addition, US naval assets including Aircraft Carries and US military basis including the huge al-Udeid base in Qatar could be within range of Iranian missiles.

    Iran strategically dominates the Middle East through its allies in Syria, the Hashd al-Shaabi (Popular Mobilization Units) in Iraq, the Houthis in Yemen, Hizbullah in Lebanon and Hamas in Gaza. In addition, Iran controls the Strait of Hormuz the most vital chokepoint in the world and is capable of blocking it at well. As a result, Iran is capable of pushing oil prices to $140 a barrel impacting adversely on the US economy and costing President Trump the 2020 presidential elections.

    That is why President Putin’s visit to Saudi Arabia has acquired great significance because it comes at a time of shifting sands under the relations between the United States and Saudi Arabia and an imperceptible shift in the global balance of power. The visit could prove to be a turning point for Saudi relations with Russia and the United States.

    With a changing global geopolitical landscape, Saudi Arabia may feel the need to ally itself with the new rising order that will shape the world in the next two decades, namely Russia’s strategic alliance with China, hence the great importance of President Putin to Saudi Arabia.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Robert Baron on October 15 2019 said:
    Our NATO ally turkey is pushing south into Syria and Iraq to position for war with Iran.

    Saudi Arabia is part of a "Arab" NATO and is not interested long term relations with Iran's current ruling party and will assist Turkey.

    Iran is completely contained and will collapse in the next 5 years.
  • Pitbulldog Montes on October 15 2019 said:
    There is no need to directly confront Iran. It will crumble by itself. It is a fragile economy. All it needs for the US is to cripple it militarily and it can be done without physically invading it. Even its own people are disgruntled with this despicable regime. Its current adventurism are mere publicity stunts to show it is a force to reckon with when the truth is it does not have the capability to survive a protracted war. It is just like Iraq during Saddam's time. All talks but no muscle.
  • Bill Simpson on October 15 2019 said:
    Iran can attack the Saudis whenever they wish, until the 2020 US election day arrives, because they know that a war around the Persian Gulf will drive gasoline prices in the USA way up, which will defeat Trump just like it did Jimmy Carter. Trump is no genius, but he is smart enough to figure that out. He knows a global oil shortage will defeat him.
    Now after he wins reelection, Trump won't care what happens, so he might bomb Iran if they start too much trouble, especially for Israel.
    Of course, should the Iranians kill some US soldiers, Trump will attack them within days, probably using hundreds of cruise missiles targeted at their oil infrastructure. I just read that the Pentagon just contracted for thousands of the latest stealth version cruise missiles.
    I would be surprised if my prediction, right after the first attack succeeded, that another one would follow in a few months, doesn't come true. They are probably planning the next attack right now. Putin is keeping his fingers crossed that they are, so as to push up his income from oil exports.
  • Phil Mirzoev on October 16 2019 said:
    Iran may consider another demonstration of its possibilities to put a harness on Saudi ambition, but now Russia has moved into the region big time and this should be taken into account. Russia may use political, diplomatic and ideological levers to reconcile those two (Iran and Saudis) and even more parties in that region.
    It would not be surprising if Russia tries to do something along those lines based, in a very simplified version, on this ideologem directed at the Middle East oil players: "Guys, you f... each other not because you have to, but because it is the political fault lines created by the US for you so that there is always weakness and conflict in the region to justify the US presence, and, together with it, advance the US interests that aren't your interests at all. You all produce oil, and the US buys that oil. You want to dictate the price to the US, and not allow the US to dictate the price to you. US can take you for a ride too, and any of you who think that its friendship costs a penny can find itself in the same situation as Libya or Syria or even Yemen, So you'd better wake up to your collective interest and open your eyes to the difference between that interest and the one of the US". Russia has a much better position to preach that ideology because Russia itself a major oil producer, and because Russia proved that actually it can put a block to the US capacity to change the regimes.
    In the 21st century the ideological antidote against American influence is not going to be based on the fantasies like "capitalism vs communism", but it is going to be based on the UNIQUE narrative about the US mostly based on the idea of its IMPERIALISM and quasi-colonial agendas.
    Whether this narrative is good or bad, true or false, it may be much more effective as an ideological and political tool.

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