Friday, September 20, 2019

Idle Rambling On A Friday Morning -- The Saudi Attack -- September 20, 2019

What a great way to start the morning. I had a great note from a reader regarding the attack on the Saudi export terminal and the oil field(s).

Debating whether or not to post the whole note, but here was my reply. One can probably guess the contents of most of the reader's note regarding the attack based on my reply:
1. A great note.

2. I have had a similar note (without the Goldman Sachs angle) from another reader who is very, very knowledgeable about all of this.

3. The common thread between that reader and your note is the emphasis on MSB being squeezed. In fact, now, it's become so much worse -- less oil to sell, and possibly even buying oil on the open market (Iraq) to fulfill contracts and keep market share.

4. From a conspiracy point of view, I agree with you: the strike was incredibly surgical. And incredibly well-planned, timed. It seems like it was a perfect operation except for perhaps a few drones/missiles being duds. Comparing it to "Pearl Harbor"  -- which some in the media did (not you) was way "over the top" but it did have the timing, surprise, surgical components that "Pearl Harbor" had but not the consequences/effects (at least yet)

5. At the end of the day, though, no matter what motive one might come up with to explain this attack, none seem to have panned out:
  • no one takes Iran any more seriously than they did before the attack 
  • Iran is to blame 
  • Iran is not to blame 
  • the media can highlight the plight of the rebels 
  • no one in American understands the Yemen rebel situation any more now than before the strike 
  • oil did not spike to $200 
  •  the IPO looks more tenuous than ever (investors more skirmish) 
  • Trump looks more presidential, just sitting and waiting, no massive retaliation (yet) 
  • Clausewitz: war is politics by other means in this case, the attack on Saudi was spectacular but I can't think of any one thing it might have accomplished 
At this post, September 15, 2019, I noted my initial thoughts on the attack.

The big winner: Iraq.

The second biggest winner: US shale.

Timing: Both this most recent reader and I noted the same thing: the timing of the attack was most interesting. It came "immediately" after the heir to the Saudi throne fired the kingdom's minister of energy and replaced him with another member of the royal family, MSB's step-brother (one of hundreds, if not thousands, I assume). That may be where the answer lies. Nothing like giving the new minister of energy a huge problem at the beginning of his tenure.


  1. 1. Squirmish or skittish. But not skirmish--that's a noun, not an adjective.

    2. I don't see the attack as keyed to the minister change. Too much planning. And really, both the attack and the minister change are parts of patterns of events going forward on own.

    3. Rest of the discussion good.

  2. What got me the most was that Iranian drones were able to fly in "Under the Radar" for the strike. That, both ours and Saudi Air def was asleep at the wheel, or not positioned well.
    Neither of those options are good and can only embolden Iran to do more.
    We need to keep our assets covered in the region, much better

    1. Guaranteed US military learned a lot from those strikes.