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Following the news of a drone attack on a Saudi oilfield, which sparked concern about global supply security, President Trump said he had authorized a release from the Strategic Petroleum Reserve.
“Based on the attack on Saudi Arabia, which may have an impact on oil prices, I have authorized the release of oil from the Strategic Petroleum Reserve, if needed, in a to-be-determined amount sufficient to keep the markets well-supplied,” the U.S. President said in a tweet late on Sunday. “I have also informed all appropriate agencies to expedite approvals of the oil pipelines currently in the permitting process in Texas and various other States.”
Trump did not specify the amount of oil that will be released.
The drone attack, which took place on Saturday, had some analysts contemplating the possibility of $100 oil after the Wall Street Journal reported it may have taken as much as half of Saudi oil production offline. Prices spiked, with Brent trading up by nearly 20 percent.
The news about the release from the Strategic Petroleum Reserve comes despite a decline in Saudi oil exports to the United States. This suggests there is still a discrepancy between the actual fundamentals situation with oil in the country and market perceptions of it.
Meanwhile, President Trump also tweeted the U.S. was “locked and loaded” and ready to respond to the attacks when the Saudis verified who was behind them. The Houthi rebels from Yemen already took responsibility for the attacks on an oilfield and a processing facility with a capacity of 5 million bpd. However, Secretary of State Mike Pompeo has blamed Iran, saying there was "no evidence the attacks came from Yemen," CNN reported.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.