Oil markets are roiling in the wake of a drone attack on two major Saudi Arabian oil installations. The attack itself caused an immediate spike in oil prices. Then came Donald Trump’s tweet: “Saudi Arabia oil supply was attacked. There is reason to believe that we know the culprit are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!”
For the record, the Houthi rebels in Yemen—which Saudi Arabia has been relentlessly bombing since 2015, killing many tens of thousands of people—have taken direct responsibility for the attack. But we know who Trump and his pals in Riyadh and Tel Aviv want to be responsible.
Within minutes Washington was ignoring the Houthi claim of responsibility and not-so-subtly hinting that Iran was behind the strike. They now claim to have evidence based on satellite images. Case closed.
Trump’s “locked and loaded” tweet sent the price of oil futures shooting upwards again, with people around the world concerned about a potential military confrontation the US and Iran. That would almost certainly escalate into a region-wide conflict, turning the Straight of Hormuz (through which almost a quarter of the world’s oil passes) into a battle zone. The economic impact of such a circumstance would be enormous.
Federal Energy Minister Angus Taylor was quick to attempt to allay any fear among Australians, saying: “It’s clear that there’s no immediate threat to our [oil] supplies.”
NRMA spokesman Peter Khoury was less cavalier.
“It’s just a reminder that we’re so reliant on overseas for our oil, and unfortunately, globally, oil comes from some of the most volatile parts of the world,” he said. “Every time it flares up like this it can adversely impact on prices here.”
Australian drivers, Khoury added, “should hope for the best but brace for the worst.”
Whatever ends up happening, you can rest assured that our political leaders here in Australia will march in lockstep behind Trump the Great, even as he steers the world into a conflagration.