Trump Pledges Help for Middle East Allies After Saudi Oil Attack
(Bloomberg) -- President Donald Trump promised to help allies following attacks on major Saudi Arabian oil facilities, even though he said the U.S. is no longer directly reliant on Middle Eastern oil and gas and has few tankers there.
“We are a net Energy Exporter,” Trump tweeted Monday morning. “We don’t need Middle Eastern Oil & Gas, & in fact have very few tankers there, but will help our Allies!”
Brent oil posted its biggest ever intraday jump Monday to more than $71 a barrel. It pared some gains, though both Brent and West Texas crude were still trading about 10% higher as news of the devastating attack on the world’s largest exporter also sent currencies of commodity-linked nations higher.
Trump’s statement Monday followed his weekend vow that the U.S. is “locked and loaded depending on verification” that Iran staged the attack on major Saudi Arabian oil facilities, an assertion already made by his secretary of state and backed by administration officials.
Trump said he’s awaiting word from Saudi Arabia about who it believed caused the attack and “under what terms we would proceed!”
Trump, in another tweet on Monday, said Iran didn’t tell the truth in June after shooting down a U.S. drone in the Strait of Hormuz. “Now they say that they had nothing to do with the attack on Saudi Arabia,” Trump said. “We’ll see?”
Several administration officials said Sunday that they had substantial evidence that Iran was behind the oil attack, not the Iranian-backed Houthi rebels in Yemen who claimed responsibility. On Saturday, Secretary of State Michael Pompeo said unequivocally in a tweet that Iran was to blame.
Two administration officials who asked not to be identified discussing internal deliberations told reporters that cruise missiles may have been used in the attacks on a Saudi oil field and the world’s biggest crude-processing facility in Abqaiq. The range from Yemen was also far beyond the distance of anything the Houthis have ever done, the officials said.
A third administration official, who also asked not to be identified discussing non-public findings, said precision-guided munitions had been used. The U.S. officials didn’t rule out that armed drones were used as well, even as they rejected the Houthi claims that they mounted the attacks using such pilotless aircraft.
Now, the challenge that the Trump administration faces is balancing a tough response to what it says is a clear act of of Iranian aggression, against concern that it’s rushing headlong into a conflict that could spiral out of control. Analysts also warn that doing nothing could send a message to Iran or its proxy militias across the Middle East that they can strike their enemies with impunity.
“There’s no great response here,” said Aaron David Miller, senior fellow at the Carnegie Endowment for International Peace. “The question becomes how does the U.S. navigate between not allowing this precedent to stand on one hand, and avoiding a punitive escalation or one designed to deter future attacks without an escalation. And the answer is there is no answer.”
Still, a major U.S. military response may be unlikely, according to experts who said they doubt Trump will be willing to use force against Tehran or risk escalating violence in the Middle East ahead of the 2020 presidential election. In June, Trump said he considered a military strike on Iran for shooting down a U.S. drone, only to call off the action at the last minute.
Analysts also said the attacks may do little to deter the president from seeking a meeting with Iranian President Hassan Rouhani in an effort to broker a new nuclear agreement.
Trump hasn’t ruled out a possible meeting with Rouhani when both are in New York in a week for the annual United Nations General Assembly. He tweeted on Sunday that the “Fake News is saying that I am willing to meet with Iran, ‘No Conditions’ That is an incorrect statement (as usual!).” But officials including Pompeo and Treasury Secretary Steven Mnuchin have told reporters publicly that Trump is willing to take a meeting with no conditions.
The administration’s “maximum pressure” stance against Iran is focused on imposing sanctions and isolating the country over its nuclear ambitions and malign activities in the region. That approach has come under renewed scrutiny at a time the president’s foreign policy team is in flux, after Trump’s firing of hawkish National Security Adviser John Bolton last week.
U.S. and Saudi officials say they’re gathering more evidence that Iran was behind the attacks -- some of it on the ground in Saudi Arabia -- that will be released in due time. Iran’s Foreign Ministry described Pompeo’s comments blaming the Islamic Republic as “blind and fruitless accusations.”
According to U.S. government information, there were 19 points of attack at state-owned Saudi Aramco’s crude-processing facility at Abqaiq and the Khurais oil field, all on the north or northwest-facing sides -- suggesting that the weaponry used came from that direction. Iraq lies to the north, and the U.S. in the past has accused Iran of stashing explosives with affiliated militias in the country. Yemen, by contrast, is hundreds of miles to the south.
Saudi Aramco lost roughly 5.7 million barrels per day of output after the attacks, although officials cited progress in restoring production.
Pompeo tweeted Saturday that there is “no evidence the attacks came from Yemen” and accused Iran of being behind “an unprecedented attack on the world’s energy supply.”
“The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression,” he added.
Paul Pillar, a former U.S. Central Intelligence Agency officer, said the one “policy option left is de-escalation -- of the Saudi air war against Yemen, and of the Trump administration’s economic war against Iran.”
Pillar, who’s now a non-resident senior fellow at Georgetown University in Washington, said “further attempts to escalate on either of those war fronts offers no reason to believe that they would be any more successful than the wars have been up to this point.”
Trump would risk criticism from many of his Republican allies if he chose to meet with Iran’s leader barely a week after accusing the country of being responsible for a strike that caused a significant disruption to the world’s oil markets. Republican Senator Lindsay Graham of South Carolina has said the U.S. shouldn’t rule out a military strike on Iranian oil facilities in response.
“Iran will not stop their misbehavior until the consequences become more real, like attacking their refineries, which will break the regime’s back,” Graham tweeted Saturday.
One Western diplomat, who asked not to be identified, said Trump sees what he wants to see in world events, so if he wanted to meet with Iran’s president, the strikes wouldn’t necessarily deter him. Trump has repeatedly brushed aside short-range missile tests by North Korea as he seeks to broker a historic nuclear pact with leader Kim Jong Un.
White House Counselor Kellyanne Conway said on “Fox News Sunday” that the administration will continue its “maximum pressure campaign,” but she added that “the president will always consider his options,” including a meeting with Rouhani. That was hours before Trump seemed to rule out a meeting unless the Iranian president met unspecified conditions.
Nor is it clear the Iranian leader would be willing to take such a meeting -- even an informal chat on the sidelines of the UN gathering -- without the U.S. making some gesture to ease its sanctions on his country. The strikes in Saudi Arabia may all but rule out such a move anytime soon despite pleas by Western leaders led by French President Emmanuel Macron.
The attacks on Saudi Arabia also pose a major test for Pompeo, who has an opportunity to consolidate power after Bolton’s departure.
Pompeo and Brian Hook, the State Department’s special representative for Iran, have argued the U.S. could afford to ramp up sanctions and diplomatic pressure on Iran because there’s plenty of global oil supply. But there’s now little cushion in the market with the major disruption caused by the drone attacks, which could force the president and his team to look for ways to relieve the pressure.
While analysts estimate Saudi Arabia may be able to restore half of the lost production as early as Monday, Trump said on Twitter Sunday that he’s authorized the release of oil from the Strategic Petroleum Reserve if needed based on the attacks “in a to-be-determined amount sufficient to keep the markets well-supplied.” The stock of about 645 million barrels of crude and petroleum products could help meet demand during the time it would take for the Saudis to repair the facilities. Trump also told U.S. agencies to expedite approvals of oil pipelines in the permitting process.
There’s also the question of the administration’s credibility. Some foreign policy analysts said it’s hard to take at face value the claim that Tehran is responsible, given the hard line against Iran advocated by Pompeo, Bolton and others.
“The Trump administration appears to have evidence of Iranian responsibility but will face skepticism from others, both because of policy disagreements between the US and its allies, and because declining to attribute an attack provides an excuse not to respond,” tweeted Michael Singh, managing director for the Washington Institute for Near East Policy.
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