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Generational Dynamics Web Log for 18-Sep-2019
18-Sep-19 World View -- Asian countries concerned about oil price spike after attack on Saudi facilities

Web Log - September, 2019

18-Sep-19 World View -- Asian countries concerned about oil price spike after attack on Saudi facilities

Identifying Iran as the perpetrator

by John J. Xenakis

This morning's key headlines from GenerationalDynamics.com

Asian countries concerned about oil price spike after attack on Saudi facilities
Identifying Iran as the perpetrator
Trump's response

Asian countries concerned about oil price spike after attack on Saudi facilities

This image provided by the US government and DigitalGlobe shows damage to the infrastructure at Saudi Aramco’s Abqaiq oil processing facility in Buqyaq. (AP)

This image provided by the US government and DigitalGlobe shows damage to the infrastructure at Saudi Aramco’s Abqaiq oil processing facility in Buqyaq. (AP)

Sunday's attack on Saudi Arabia's oil infrastructure is raising concerns in four Asian countries -- China, India, Japan and South Korea -- that the world's oil markets have just taken a sharp turn for the worst that will result in continuing worldwide oil disruption and far higher prices.

The governments of China, India, Japan and South Korea have harsh differences in many areas. China's criminal annexation of the South China Sea has infuriated everyone. Japan and South Korea are having a trading war that is becoming increasingly serious and hostile every day. China and India have numerous border conflicts, and were at war in the 1960s.

But the four countries are united in their concerns about the possibility of oil prices spiking, which would hurt all of their economies. In particular, all four are warning the US against a war with Iran, which would hugely destabilize the global oil markets, and send prices sky high.

Most analysts believe that Iran perpetrated the attack, gut there's a broader problem, but no matter who the perpetrator was. The fact that the attack occurred at all means that it won't be long before more terrorists begin using drones to attack oil infrastructure anywhere and, indeed, any targets anywhere, with permanently high oil prices.

Identifying Iran as the perpetrator

Sunday's attack on Saudi Arabia's oil infrastructure caused oil prices to spike 12%, the largest one-day increase in history. However, prices have retreated slightly, especially after Saudi's announcement that most of the oil production would be restored within a few days. If true, the Saudis are being lauded for the resilience they've built in to the oil infrastructure.

It's pretty much universally believed that Iran was the perpetrator, and that the attack was launched by Iran’s Revolutionary Guards Corps (IRGC). Iran denies responsibity for the attack, but it's generally believed that Iran is responsible, and this is the sixth attack on Saudi oil facilities in the last four months.

Iran's denials are being disregarded. The claim by the Iran-sponsored Yemeni Houthis that they launched the attack from Yemen is being disregarded, and is viewed as an attempt to shield Iran from blame.

According to several reports, all originating from US intelligence sources, the coordinated attack was extremely sophisticated. US and Saudi intelligence officials referenced have concluded that 12 low-flying cruise missiles were launched from Khuzestan in southern Iran, and 5 drones were launched from Anbar province in western Iraq.

According to officials, if the missiles had come from Yemen, then Saudi radar would have detected them. However, the Saudis were not prepared to detect missiles coming in from the north.

Even if the Saudis recovered quickly from Sunday's attack, there are concerns that Iran will simply make more attacks. It's believed that Iran's strategy is to cause oil shortages and push the price of oil above $100 a barrel, so that America will be forced to reduce the sanctions preventing Iran from selling oil. It's believed that Iran will avoid American targets, since doing so would cause an immediate military response.

Trump's response

Therefore, analysts are saying that there MUST be a retaliatory response, to force Iran to stop the attacks.

Few politicians or media people have the vaguest clue about Saudi Arabia's history prior to the murder of Jamal Khashoggi in October. However, the relationship between Saudi Arabia and the US is very deep.

Since the 1930s, America and Saudi Arabia have had a very specific core understanding: That Saudi Arabia will guarantee to supply all the oil that America and the West need, and, in return, America and the West must guarantee the security of Saudi Arabia.

The exact details of the US-Saudi relationship have had to change from time to time, based on international events such as Iran's revolution, Iraq's invasion of Kuwait, the Iraq war, the Soviet invasion of Afghanistan, Obama's nuclear deal with Iran, Syria's civil war, the rise of ISIS.

While the 1979 Iranian hostage crisis and subsequent Iranian behavior drove a wedge between the US and Iran, the 1973 oil embargo, which came out of Israel's war with Egypt, did the opposite -- it cemented the US-Saudi relationship.

The core has always remained the same: The Saudis will guarantee oil, the Americans will guarantee security. That core is changing slightly, now that America has become energy self-sufficient in the last two years, but like it or not, America is still policeman of the world, but the core agreement that the Saudis will guarantee oil and the Americans will guarantee security is unchanged.

Therefore, it's believed that Donald Trump has asked the military to provide a list of options of possible responses. These options would include diplomacy (the United Nations Security Council), cyber attacks (to cripple Iran's intelligence cabilities), and special forces or missiles to proportionally attack Iran's oil production facilities.

Analysts I've heard seem unanimous in saying that there must be some response, or else Iran will simply launch more and more attacks, until there is a response.

John Xenakis is author of: "World View: Iran's Struggle for Supremacy -- Tehran's Obsession to Redraw the Map of the Middle East" (Generational Theory Book Series, Book 1), September 2018, Paperback: 153 pages, over 100 source references, $7.00, https://www.amazon.com/World-View-Supremacy-Obsession-Generational/dp/1732738610/

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(Comments: For reader comments, questions and discussion, see the Generational Dynamics World View News thread of the Generational Dynamics forum. Comments may be posted anonymously.) (18-Sep-2019) Permanent Link
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Generational Dynamics Web Log for 18-Sep-2019 18-Sep-19 World View -- Asian countries concerned about oil price spike after attack on Saudi facilities

Asian countries concerned about oil price spike after attack on Saudi facilities

Identifying Iran as the perpetrator

Trump's response

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Generational Dynamics Web Log for 18-Sep-2019
18-Sep-19 World View -- Asian countries concerned about oil price spike after attack on Saudi facilities