Trump authorizes SPR release after Saudi attack: Update

Updates with additional comments by President Trump

US president Donald Trump said today he has authorized a release of US emergency oil stocks following the 14 September incident that cut Saudi output by 5.7mn b/d.

"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," Trump said via Twitter.

US Strategic Petroleum Reserve (SPR) stocks stand at 630mn bl. Trump's tweet today reiterates an announcement from the US Department of Energy (DOE) yesterday. DOE said it would release the US emergency stocks, in collaboration with the IEA on "potential available options for collective global action, if needed."

DOE has just completed a sale of nearly 10mn bl of crude from the SPR for delivery in October and November.

A return to full crude production capacity in Saudi Arabia following yesterday's drone attacks on two key oil installations could take up to six months, a source familiar with the damage at the two sites told Argus today. The attacks on the Abqaiq crude processing plant and another facility at the 1.45mn b/d Khurais oil field have forced state-owned Saudi Aramco to shut in 5.7mn b/d of crude output.

The Abqaiq plant is Saudi Aramco's main center for processing Arab Light and Arab Extra Light crude grades. It handled about half of the company's crude output last year. Khurais is Riyadh's second-largest oil field by capacity.

The attacks on the Saudi facilities caught the administration amid internal deliberations of a possible meeting between Trump and Iranian president Hassan Rohani, perhaps at the UN General Assembly meeting later this month.

Trump has said repeatedly that his sanctions policy has weakened Iran sufficiently enough that it would be ready to negotiate an agreement on US terms.

White House political adviser Kellyanne Conway, in a televised interview today, said Trump is still considering a meeting with Rohani. Senior US officials said last week Trump is willing to meet Rohani without preconditions.

But Trump today said "that is an incorrect statement," characteristically blaming the media.

US secretary of state Mike Pompeo said yesterday Iran was responsible, and Conway repeated that assertion today.

Trump, however, stopped short of blaming Iran. "There is reason to believe that we know the culprit, are locked and loaded depending on verification," he wrote on Twitter.

He indicated no immediate US response is underway. The US will wait to hear from Riyadh "as to who they believe was the cause of this attack, and under what terms we would proceed," Trump said.

Iran's foreign ministry has dismissed as "meaningless" the US claims that it was behind yesterday's drone attacks. Yemen's Houthi rebels, who are fighting a war against Saudi-led forces, said they targeted the two plants using 10 drones.

Washington's so-called "maximum pressure" campaign has failed and has now transformed into one of "maximum lies," Iran's foreign ministry said.

Trump also took advantage of the incident to announce he "would expedite approvals of the oil pipelines currently in the permitting process in Texas and various other states." And the White House used the incident to promote Trump's "energy dominance" policy of spurring US domestic oil production. "This president also, through his energy policy, has made us less dependent on these foreign dictators and bad regimes for energy supply," Conway said. "We, now, in the US are net exporters of natural gas and oil at the highest levels this country has ever seen and that will continue."