US To Remove Patriot Missile Protection From Saudi Arabia Amid Oilpocalypse - - ZeroHedge

[Tom Kirkman + 8,860]

The Tylers weigh in with their usual snark and fly-in-the-ointment viewpoint.  

US To Remove Patriot Missile Protection From Saudi Arabia Amid Oilpocalypse

Petrodollar panic?

As tensions between OPEC (cough - the Saudis - cough) and Washington rise over the supply (and price) of oil globally amid a pandemic-driven demand collapse, it would appear President Trump may have just gone 'nuclear'.

"...there will be blood."

The Wall Street Journal reports that The U.S. is removing Patriot anti-missile systems from Saudi Arabia and is considering reductions to other military capabilities - marking the end, for now, of a large-scale military buildup to counter Iran, according to U.S. officials.

As a reminder, OilPrice.com's Simon Watkins warned last week that President Donald Trump was considering all options available to him to make the Saudis pay for the oil price war as the crash that followed has done significant damage to the U.S. oil industry.

Quote

 

With last month having seen the indignity of the principal U.S. oil benchmark, West Texas Intermediate (WTI), having fallen into negative pricing territory, U.S. President Donald Trump is considering all options available to him to make the Saudis pay for the oil price war that it started, according to senior figures close to the Presidential Administration spoken to by OilPrice.com last week. It is not just the likelihood that exactly the same price action will occur to each front-month WTI futures contract just before expiry until major new oil production cuts come from OPEC+ that incenses the U.S. nor the economic damage that is being done to its shale oil sector but also it is the fact that Saudi is widely seen in Washington as having betrayed the long-standing relationship between the two countries. Right now, many senior members on Trump’s closest advisory circle want the Saudis to pay for its actions, in every way, OilPrice.com understands.

This relationship was established in 1945 between the U.S. President Franklin D. Roosevelt and the Saudi King at the time, Abdulaziz, on board the U.S. Navy cruiser Quincy in the Great Bitter Lake segment of the Suez Canal and has defined the relationship between the two countries ever since.

As analysed in depth in my new book on the global oil markets, the deal that was struck between the two men at that time was that the U.S. would receive all of the oil supplies it needed for as long as Saudi Arabia had oil in place, in return for which the U.S. would guarantee the security of the ruling House of Saud.

The deal has altered slightly since the rise of the U.S. shale oil industry and Saudi Arabia’s attempt to destroy it from 2014 to 2016 in that the U.S. also expects the House of Saud to ensure that Saudi Arabia not only supplies the U.S. with whatever oil it needs for as long as it can but also that it also allows the U.S. shale industry to continue to function and to grow.

For the U.S., if this means that Saudi Arabia loses out to U.S. shale producers by keeping oil prices up but losing out on export opportunities to U.S. firms then that is just the price that the House of Saud must pay for the continued protection of the U.S. - politically, economically, and militarily.

 

And now, as The Journal reports, the U.S. is removing four Patriot missile batteries from Saudi Arabia along with dozens of military personnel sent following a series of attacks on the Saudi oil facilities last year, according to several U.S. officials. The attacks were part of hostilities that took place over several months.

President Donald Trump has made clear whenever he has sensed a lack of understanding on the part of Saudi Arabia for the huge benefit that the U.S. is doing the ruling family:

“He [Saudi King Salman] would not last in power for two weeks without the backing of the U.S. military.”

...

 

[Marcin2 + 725]

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Edited May 19, 2020 by Marcin2
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[BLA + 1,666]

On 5/7/2020 at 1:59 PM, Tom Kirkman said:

The Tylers weigh in with their usual snark and fly-in-the-ointment viewpoint.  

US To Remove Patriot Missile Protection From Saudi Arabia Amid Oilpocalypse

Petrodollar panic?

As tensions between OPEC (cough - the Saudis - cough) and Washington rise over the supply (and price) of oil globally amid a pandemic-driven demand collapse, it would appear President Trump may have just gone 'nuclear'.

"...there will be blood."

The Wall Street Journal reports that The U.S. is removing Patriot anti-missile systems from Saudi Arabia and is considering reductions to other military capabilities - marking the end, for now, of a large-scale military buildup to counter Iran, according to U.S. officials.

As a reminder, OilPrice.com's Simon Watkins warned last week that President Donald Trump was considering all options available to him to make the Saudis pay for the oil price war as the crash that followed has done significant damage to the U.S. oil industry.

And now, as The Journal reports, the U.S. is removing four Patriot missile batteries from Saudi Arabia along with dozens of military personnel sent following a series of attacks on the Saudi oil facilities last year, according to several U.S. officials. The attacks were part of hostilities that took place over several months.

President Donald Trump has made clear whenever he has sensed a lack of understanding on the part of Saudi Arabia for the huge benefit that the U.S. is doing the ruling family:

“He [Saudi King Salman] would not last in power for two weeks without the backing of the U.S. military.”

...

 

Most do not realize the Saudi refinery attacked last year has a Patriots Missile system bought and paid for by the Saudis.  Along with the purchase U.S. military provided extensive training for the Saudis for the purchased systems.  

For whatever reason the Patriot System installed was not activated and no trained Saudi personal were present.  Ain't gonna work if you don't turn it on .   .   .   .     It's like the $3400 Peloton Exercise bike my wife had me buy for her.  After initial excitement it no longer is used for Exercise but substitutes as an expensive clothes hanger.

Trump sent more troops, Patriot Systems and military equipment after the attacks.   He has been very good to KSA.  However, Saudi flooding the U.S. market with Saudi oil was more than Trump could justify.  Especially with oil state congressional member's vociferous complaints.

I think he may be trying to send MBS a message, but will not abandon them .  .  .  .   for now. Could even be a ploy to placate the House Reps and Senators that object to Saudis flooding U.S. Gulf with oil while the U.S. spends $30 to $34 Billion a year so Saudis and another half dozen OPEC members can safely transport their oil to China and the world. 

The fact it was published in the WSJ lends some credibility to the story.  But you never know. 

Saudis have always paid, at least in part for the security the U.S. provided.  Those days are over , at least for a while.  Their Moody's Credit Rating recently reduced to Negative and they will have to issue over $100 Billion in bonds this year to cover shortfalls.

The Saudis need the friendship from the U.S. more than ever.  They show their gratitude by trying to kill U.S. shale industry ?

Another consideration that we've talked about is the fact the U.S.  does not want to get bogged down in yet another ME conflict. Many think the U.S. presence alone would deter any attack. These days you can not count on that being enough.  When a country gets very desperate they might try anything (Iran) to get the world behind them .  Iran would be taking a chance.  But might have no choice in their minds.  If a serious conflict starts the U.S. can't just say we decided to go home. 

Let's watch and see if the Saudi Oil Armada continues its voyage to the U.S. Gulf of Mexico.  Hopefully MBS comes to his senses. 

Edited May 8, 2020 by BLA

[Tom Kirkman + 8,860]

From Oil Price main news site

U.S. To Withdraw Patriot Missiles From Saudi Arabia Over Oil Dispute

[John Foote + 1,135]

What is being removed I suspect is just the few sites put in, and manned by US troops. The country has plenty of Patriot sites, a couple with I used to live under the umbrella of semi-protection. Blasting a Scud to bits is a great theater, but is just spreads the debris field larger. Now if Iranian technology with ballistic missiles has gotten seriously accurate, it will help. 

Glad for the move. I don't know who maintains the Patriots site they do have. Their air force is largely maintained by BAE, and is full of Brit, Aussie, and some Americans, as a workforce. Used to enjoy partying with them. 

Years ago I complained to someone about us selling F-16s. The old guy laughed, the thing about leading technology is it comes with a long umbilical cord. These places you are worried about, they become addicted to us to maintain it. More than a kernal of truth there.  

[KeyboardWarrior + 527]

6 hours ago, Marcin2 said:

US should have removed them a long time ago. S-400 is much better and Saudi Arabia always wanted to have it. Saudi Arabia would immediately get 100% safety guarantees from Turkey. Russia and Iran if SA places an order. The rest of Gulf countries and Israel are SA allies so actually they would be Ok with this US move.

But for Putin it would be too much luck, I do not believe this story at all, zerohedge was always pro Russian.

that must be why the S400's components are listed online. Must be some impressive piece.

[0R0 + 6,251]

8 hours ago, Marcin2 said:

US should have removed them a long time ago. S-400 is much better and Saudi Arabia always wanted to have it. Saudi Arabia would immediately get 100% safety guarantees from Turkey. Russia and Iran if SA places an order. The rest of Gulf countries and Israel are SA allies so actually they would be Ok with this US move.

But for Putin it would be too much luck, I do not believe this story at all, zerohedge was always pro Russian.

Iran and Russia would try to attack Saudi and capture its oil. Friends, they can't be. Russia has never done "security arrangements" with the cattle, it did control and slaughter. And with Iranian control of Gulf oil, Iran would not really need Russia for a friend. 

But bottom line, the Saudis are going to reverse their VLCCs heading to the Gulf and go to China and Europe. Saudi can't afford to buy another set of friends. 

On the other hand, the US would have a fine old time if Iran and Saudi are at war and oil supplies out of the Gulf are curtailed haphazardly. China, not so much. 

[Tom Kirkman + 8,860]

US pulls Patriot missiles, fighter aircraft from Saudi Arabia amid dispute

WASHINGTON — The U.S. is pulling two Patriot missile batteries and some fighter aircraft out of Saudi Arabia, an American official said Thursday, amid tensions between the kingdom and the Trump administration over oil production.

The official said the decision removes two batteries that were guarding oil facilities in Saudi Arabia but leaves two Patriot batteries at Prince Sultan Air Base in the Saudi desert, along with other air defense systems and jet fighters.

The decision scales back the American presence in Saudi Arabia just months after the Pentagon began a military buildup there to counter threats from Iran. About 300 troops that staff the two batteries would also leave Saudi Arabia, according to the official, who spoke on condition of anonymity to discuss sensitive military operations.

 

====================================================

Note that key bit above ^  "removes two batteries that were guarding oil facilities in Saudi Arabia"

Here's that link from September 2020 from Military Times

Following attacks, Pentagon prepping to send troops to Saudi Arabia’s aid

The U.S. is preparing to deploy troops to the Middle East as a response to what officials have deemed an Iran-based attack on Saudi Arabian oil fields last week, Defense Secretary Mark Esper told reporters Friday in a Pentagon briefing.

The number, origin and destination of those troops is to be determined, he said.

“This is the first step we’re taking with regard to responding to these attacks,” Esper said, not ruling out further escalation if the deployment does not deter further aggression from Iran.

The announcement came after a meeting with top Pentagon officials and the National Security Council on Friday afternoon.

The troops deployed will be “defensive in nature,” Esper said, and focused on air and missile defense capabilities.  ...

 

... The oil field attacks came after a series of belligerent moves by Iran this year, which Esper characterized as an increasingly isolated nation heading toward economic collapse.  ...

 

[Douglas Buckland + 6,308]

14 hours ago, Marcin2 said:

US should have removed them a long time ago. S-400 is much better and Saudi Arabia always wanted to have it. Saudi Arabia would immediately get 100% safety guarantees from Turkey. Russia and Iran if SA places an order. The rest of Gulf countries and Israel are SA allies so actually they would be Ok with this US move.

But for Putin it would be too much luck, I do not believe this story at all, zerohedge was always pro Russian.

So the S-400 has actually been used as an anti-missile weapon? Where?

[Marcin2 + 725]

-

Edited May 19, 2020 by Marcin2
-

[Gen 0]

This is great news for Saudi Arabia.  Please bring in the S-300/400 from Russia, as the Patriot missile was surprisingly useless against last year attack (was it disabled intentionally?).  Please cancel the F-15SA from Boeing and replace it with the Eurofighter / Rafale / Su-35 / Gripen-E / Su-57 etc...  Saudi Arabia should realize long time ago Russia is the true friend from this oil price war with the USA.  The Saudis should not contradict themselves anymore.

[Tom Kirkman + 8,860]

15 minutes ago, Gen said:

This is great news for Saudi Arabia.  Please bring in the S-300/400 from Russia, as the Patriot missile was surprisingly useless against last year attack (was it disabled intentionally?).  Please cancel the F-15SA from Boeing and replace it with the Eurofighter / Rafale / Su-35 / Gripen-E / Su-57 etc...  Saudi Arabia should realize long time ago Russia is the true friend from this oil price war with the USA.  The Saudis should not contradict themselves anymore.

 

13 hours ago, BLA said:

Most do not realize the Saudi refinery attacked last year has a Patriots Missile system bought and paid for by the Saudis.  Along with the purchase U.S. military provided extensive training for the Saudis for the purchased systems.  

For whatever reason the Patriot System installed was not activated and no trained Saudi personal were present.  Ain't gonna work if you don't turn it on .   .   .   .     It's like the $3400 Peloton Exercise bike my wife had me buy for her.  After initial excitement it no longer is used for Exercise but substitutes as an expensive clothes hanger.

 

"Ain't gonna work if you don't turn it on ."

 

[Gen 0]

16 minutes ago, Tom Kirkman said:

 

 

"Ain't gonna work if you don't turn it on ."

 

Fine. But why the Saudis have to rely on the US on national defense when it is also the US who is your primary competitor in the oil market where Saudi economy largely based on? It makes no sense in the long term view of the Saudis.

[Tom Kirkman + 8,860]

17 minutes ago, Gen said:

Fine. But why the Saudis have to rely on the US on national defense when it is also the US who is your primary competitor in the oil market where Saudi economy largely based on? It makes no sense in the long term view of the Saudis.

You may want to brush up on the history of the Petrodollar, and the longstanding agrrements between U.S. and Saudi Arabia regarding oil and military.

[Dan Warnick + 6,100]

4 hours ago, Tom Kirkman said:

US pulls Patriot missiles, fighter aircraft from Saudi Arabia amid dispute

WASHINGTON — The U.S. is pulling two Patriot missile batteries and some fighter aircraft out of Saudi Arabia, an American official said Thursday, amid tensions between the kingdom and the Trump administration over oil production.

The official said the decision removes two batteries that were guarding oil facilities in Saudi Arabia but leaves two Patriot batteries at Prince Sultan Air Base in the Saudi desert, along with other air defense systems and jet fighters.

The decision scales back the American presence in Saudi Arabia just months after the Pentagon began a military buildup there to counter threats from Iran. About 300 troops that staff the two batteries would also leave Saudi Arabia, according to the official, who spoke on condition of anonymity to discuss sensitive military operations.

 

====================================================

Note that key bit above ^  "removes two batteries that were guarding oil facilities in Saudi Arabia"

Here's that link from September 2020 from Military Times

Following attacks, Pentagon prepping to send troops to Saudi Arabia’s aid

The U.S. is preparing to deploy troops to the Middle East as a response to what officials have deemed an Iran-based attack on Saudi Arabian oil fields last week, Defense Secretary Mark Esper told reporters Friday in a Pentagon briefing.

The number, origin and destination of those troops is to be determined, he said.

“This is the first step we’re taking with regard to responding to these attacks,” Esper said, not ruling out further escalation if the deployment does not deter further aggression from Iran.

The announcement came after a meeting with top Pentagon officials and the National Security Council on Friday afternoon.

The troops deployed will be “defensive in nature,” Esper said, and focused on air and missile defense capabilities.  ...

 

... The oil field attacks came after a series of belligerent moves by Iran this year, which Esper characterized as an increasingly isolated nation heading toward economic collapse.  ...

 

Is it possible that the batteries and the jets were scheduled for repair/replacement and rotation out of there anyway, and that it just makes a desired impact by putting the moves in print?

[pisstol + 48]

Saudi Arabia has caused economic damage to the US and other countries numerous times. The Arab oil embargo of 1973-4, the 2014 price war, and this latest price war. But retaliating by removed Patriot missiles could be perceived as a political stunt, or a stunt to grab headlines. And it could have unpredictable and undesirable consequences. Most people would agree that Saudi Arabia caused the U.S. economic damage. But how much? And how much does the retaliation cost S.A.? It might be better if the USA had a consistent policy to price in the economic damage cause by S.A. into each barrel of oil. I assume this would have to be done by tariff. Insurance companies are able to put dollar figures on risk. But I don't think this idea is like tobacco and alcohol taxes. To the best of my knowledge, in the U.S. those taxes are not computed to equal the harm done by tobacco and alcohol, and that money does not go to an account to repay the people harmed in some way. I am not talking about forbidding the use of Saudi crude, or even discouraging it, but properly pricing it. If a barrel of Saudi crude costs $50, but entanglements with Saudi Arabia have averaged out to cost the U.S. $10 a barrel for the last few decades, then any American should pay $60 per barrel, because he has to pay for the recurrent damage S.A. causes the economy. This kind of "retaliation" is less emotional than other kinds that are not measured and that may have unforeseen consequences.

[James Regan + 1,776]

9 hours ago, Tom Kirkman said:

Most do not realize the Saudi refinery attacked last year has a Patriots Missile system bought and paid for by the Saudis.  Along with the purchase U.S. military provided extensive training for the Saudis for the purchased systems.  

For whatever reason the Patriot System installed was not activated and no trained Saudi personal were present.  Ain't gonna work if you don't turn it on .   .   .   .     It's like the $3400 Peloton Exercise bike my wife had me buy for her.  After initial excitement it no longer is used for Exercise but substitutes as an expensive clothes hanger.

If you buy a system from whomever does the selling, isn't it your system, if you have trained the guys and they have bought the gear, then how can you take it back? Perhaps there is a software support deal like windows etc, you know that guarantee deal they try to sell you on a peloton clothes hanging bicycle and similar lol.

I agree the US should pull right out and let the dice roll, my thoughts are its a token gesture to keep certain hawks at bay in gov.com There a much bigger picture at play here, how do you just walk away from all that work done, it would be like a kick in the nuts when Putin roles in to fill the vacuum or worse still the Chinky Chonkies Yellow Peril rolling out the silk carpet. Lots to be considered.

[Dan Warnick + 6,100]

Does anyone really believe the U.S. will pull out of the KSA?  We've been there for worse and I reckon we will be again.  National and International security and all that.  President Trump is very aware of the game, and he pulls the strings and lets the strings slacken when necessary.  That's the game.  And I believe we will keep playing it for the foreseeable future.

[BLA + 1,666]

10 hours ago, Tom Kirkman said:

You may want to brush up on the history of the Petrodollar, and the longstanding agrrements between U.S. and Saudi Arabia regarding oil and military.

"Long-standing agreement"

Saudis broke that agreement with predatory pricing and monopolistic bullying.

Saudis need to learn about free markets.   

They need to wake up to reality.  

[BLA + 1,666]

19 hours ago, James Regan said:

If you buy a system from whomever does the selling, isn't it your system, if you have trained the guys and they have bought the gear, then how can you take it back? Perhaps there is a software support deal like windows etc, you know that guarantee deal they try to sell you on a peloton clothes hanging bicycle and similar lol.

I agree the US should pull right out and let the dice roll, my thoughts are its a token gesture to keep certain hawks at bay in gov.com There a much bigger picture at play here, how do you just walk away from all that work done, it would be like a kick in the nuts when Putin roles in to fill the vacuum or worse still the Chinky Chonkies Yellow Peril rolling out the silk carpet. Lots to be considered.

The original systems bought and paid for were supposed to protect the refinery are the property of KSA. 

The problem is the Saudis let them sit there .  They didn't want to maintain the training it takes to operate the installations in a prepared ready state. 

After the attack last year Trump sent over 10,000 additional troops and several additional Patriot Systems gratis .  All this at the expense of the benevolent U.S. taxpayer. These are the systems they are now removing. 

James, I'm with you bring all U.S. troops home and let the chips fall where they may. 

Edited May 9, 2020 by BLA

[Tom Kirkman + 8,860]

2 minutes ago, BLA said:

"Long-standing agreement"

Saudis broke that agreement with predatory pricing and monopolistic bullying.

Saudis need to learn about free markets.   

They need to wake up to reality.  

Agreed.  Regardless of whatever Trump or his advisors believe, I see no evidence that Saudi Arabia is an actual ally to U.S. interests.

I still view Saudi Arabia as one of the worst absolute dictatorships in the world, along with Iran and North Korea.

One of the niggling little differences between the absolute totalitarian dictatorships of North Korea and Saudi Arabia:

-  North Korea does not allow any public display of religion.  Religion is de facto banned in North Korea.

-  Saudi Arabia does not allow any public display of religion except for Islam.  All religions besides Islam are de facto banned in Saudi Arabia.

[0R0 + 6,251]

12 hours ago, Gen said:

Fine. But why the Saudis have to rely on the US on national defense when it is also the US who is your primary competitor in the oil market where Saudi economy largely based on? It makes no sense in the long term view of the Saudis.

Saudi still has the cheapest lifting cost oil. It retains that advantage with Kuwait and Iraq. That means that they are all targets for imperial domination. The US model allows them to keep their revenue and independent politics. The US as competitor is a new phenomenon and is not really a threat to Saudi, as they have little intention to increase production out of the existing fields, just develop the area in the DMZ between them and Kuwait.Saudi and the gulf countries do not want more market share. They want higher prices. They view the oil as a patrimony and want it to continue flowing at a moderate rate. These are not businesses as they are in the US and Russia (in Russia the oil companies control Putin) but are treasure to be dispersed over generations. 

Your framework of understanding is entirely off. 

[0R0 + 6,251]

2 hours ago, BLA said:

The originally systems bought and paid for that were supposed to guard the refinery are the property of KSA. 

The problem is the Saudis let them sit there .  They didn't want to maintain the training it takes to operate the installations in a prepared state. 

After the attack last year Trump sent over 10,000 additional troops and several additional Patriot Systems gratis at the expense of the benevolent U.S. taxpayer. These are the systems they are now removing. 

James, I'm with you bring all U.S. troops home and let the chips fall where they may. 

That is the Trump terms of engagement. Saudis need to pay for their defense. So if they want Patriot missiles, they need to pay for them and remember to maintain train and operate them. 

The troops are not coming home, but they may be pulled aside to let Iran and Saudi duke it out.

Anyways, the exercise has worked its magic on the oil markets and prices have gotten an extra boost well beyond the demand increases from states opening up. We broke the CV19 downtrend this week and tested it and rebounded today, and are above the 20 day MA. 

[Dan Warnick + 6,100]

7 hours ago, 0R0 said:

Anyways, the exercise has worked its magic on the oil markets and prices have gotten an extra boost well beyond the demand increases from states opening up. We broke the CV19 downtrend this week and tested it and rebounded today, and are above the 20 day MA. 

Proportional strings pulled, or slackened depending on your perspective, by Donald Trump.  Don't underestimate this man, IMHO.

[BLA + 1,666]

On 5/8/2020 at 4:46 AM, Douglas Buckland said:

So the S-400 has actually been used as an anti-missile weapon? Where?

Turkey