Saudis are Willing to Meet All Orders From Ex-Iran Oil Buyers

[wrs + 893]

Yep, looks like Iran is using asymmetric tactics to slow down the KSA oil exports.  Maybe they can't go to the extreme of blocking the Straits but they can pick the tankers off at the refueling hub.  Lot's of vulnerabilities the aircraft carrier task forces can't cover.  Oil may be heading to $100 sooner than later.

Edited May 13, 2019 by wrs

[Torgom Pogossian + 6]

false flag?

[wrs + 893]

 

https://nypost.com/2019/05/14/saudi-arabia-claims-oil-pipeline-was-attacked-by-drones/

In a statement carried on the state-run Saudi Press Agency, Energy Minister Khalid al-Falih said that drones attacked a petroleum pumping station supplying a pipeline running from its oil-rich Eastern Province to the Yanbu Port on the Red Sea.

A fire broke out and firefighters later brought it under control, though the state-run Saudi Aramco stopped pumping oil through the pipeline.

 

 

Now the east west pipeline across the country is attacked.

Edited May 14, 2019 by wrs

[Bhimsen Pachawry + 72]

On 5/13/2019 at 5:44 PM, wrs said:

Yep, looks like Iran is using asymmetric tactics to slow down the KSA oil exports.  Maybe they can't go to the extreme of blocking the Straits but they can pick the tankers off at the refueling hub.  Lot's of vulnerabilities the aircraft carrier task forces can't cover.  Oil may be heading to $100 sooner than later.

 

32 minutes ago, wrs said:

 

https://nypost.com/2019/05/14/saudi-arabia-claims-oil-pipeline-was-attacked-by-drones/

In a statement carried on the state-run Saudi Press Agency, Energy Minister Khalid al-Falih said that drones attacked a petroleum pumping station supplying a pipeline running from its oil-rich Eastern Province to the Yanbu Port on the Red Sea.

A fire broke out and firefighters later brought it under control, though the state-run Saudi Aramco stopped pumping oil through the pipeline.

 

 

Now the east west pipeline across the country is attacked.

How did the ship which was docked get sabotaged without any proper attack and had no oil spill? UAE ports have security guards who prevent people from just getting in the docked ships.

Also, drone attacking is a big question. How were the drones allowed to come inside the border? Drones are slow and can be easily detected and shot down by radars.

This raises a doubt whether it is a false flag attack from KSA & UAE to get an excuse to attack Iran?

[wrs + 893]

5 minutes ago, Bhimsen Pachawry said:

 

How did the ship which was docked get sabotaged without any proper attack and had no oil spill? UAE ports have security guards who prevent people from just getting in the docked ships.

Also, drone attacking is a big question. How were the drones allowed to come inside the border? Drones are slow and can be easily detected and shot down by radars.

This raises a doubt whether it is a false flag attack from KSA & UAE to get an excuse to attack Iran?

The ships were anchored, not docked.  Limpet mines appear to be the culprits based on the damages shown and the fact the ships aren't moving.  The mines were probably attached around the rudder area which if it distorts the rudder or drive shaft will make the ship useless without sinking or catching on fire.  Pretty effective if you want to slow down oil transport.

The drones are hard to detect on radar and the area where they attacked is a large desert, how do you expect the Saudis to have all of that covered by radar?  Maybe you don't know how radar works?  Drones are like birds and they don't show up very well on radar.  In addition, radar has a very limited coverage area, there are always gaps, especially for something as small as a drone.

[Guillaume Albasini + 851]

26 minutes ago, Bhimsen Pachawry said:

 

How did the ship which was docked get sabotaged without any proper attack and had no oil spill? UAE ports have security guards who prevent people from just getting in the docked ships.

Also, drone attacking is a big question. How were the drones allowed to come inside the border? Drones are slow and can be easily detected and shot down by radars.

This raises a doubt whether it is a false flag attack from KSA & UAE to get an excuse to attack Iran?

 

Drones flying at low altitude can avoid radars.

The ships were not in the port but near the port at around 10 miles of the coast.

It's an anchorage area with a lot of ships, mainly tankers, as we can see on Marine Trafic website :

Edited May 14, 2019 by Guillaume Albasini
image added

[Bhimsen Pachawry + 72]

1 hour ago, wrs said:

The ships were anchored, not docked.  Limpet mines appear to be the culprits based on the damages shown and the fact the ships aren't moving.  The mines were probably attached around the rudder area which if it distorts the rudder or drive shaft will make the ship useless without sinking or catching on fire.  Pretty effective if you want to slow down oil transport.

The drones are hard to detect on radar and the area where they attacked is a large desert, how do you expect the Saudis to have all of that covered by radar?  Maybe you don't know how radar works?  Drones are like birds and they don't show up very well on radar.  In addition, radar has a very limited coverage area, there are always gaps, especially for something as small as a drone.

Who attached the mines? How can anyone just come in with a mine in territorial waters of UAE?

Drones which can carry bombs will not be small ones. So, evading radar is very difficult. The radar coverage is quite good nowadays with ranges extending to 600km at times. Saudi has plenty of radars and air defence sites every where. Even civilian radars to track planes coming and going are operational. 

1 hour ago, Guillaume Albasini said:

 

Drones flying at low altitude can avoid radars.

The ships were not in the port but near the port at around 10 miles of the coast.

It's an anchorage area with a lot of ships, mainly tankers, as we can see on Marine Trafic website :

Saudi land s mostly plain and drones will find it hard to evade radar. There is a limit about low flying as lower flying drones will also have difficulty in communicating with handler and remote. None in Arab area has GEO satellite for military communications that can control drones. So, how did drone carrying a bomb evade radar?

Also, how did anyone manage to sabotage a ship in territorial waters of UAE where unauthorised ships are not allowed to enter

[wrs + 893]

19 minutes ago, Bhimsen Pachawry said:

Who attached the mines? How can anyone just come in with a mine in territorial waters of UAE?

Drones which can carry bombs will not be small ones. So, evading radar is very difficult. The radar coverage is quite good nowadays with ranges extending to 600km at times. Saudi has plenty of radars and air defence sites every where. Even civilian radars to track planes coming and going are operational. 

Saudi land s mostly plain and drones will find it hard to evade radar. There is a limit about low flying as lower flying drones will also have difficulty in communicating with handler and remote. None in Arab area has GEO satellite for military communications that can control drones. So, how did drone carrying a bomb evade radar?

Also, how did anyone manage to sabotage a ship in territorial waters of UAE where unauthorised ships are not allowed to enter

Radar ranges you state are for fighter jets and other large aircraft.  With a drone, we are talking about something that is two orders of magnitude smaller than a commercial airplane or fighter jet.  A bomb that blows up a pipeline needn't be that large, maybe 10 lbs would do.  In addition, if there are drones and the radar detects them, how do you shoot them down?  What forces can you deploy in time to stop them?  The houthis have been working on this for several years and they are getting better and better at defeating these systems.

The ships are at anchor and again, it's a large area where you don't need a ship to attach a limpet mine.  A 20ft skiff is fine.  These are clearly stealthy attacks on a small scale which are not easily defended.  

Edited May 14, 2019 by wrs

[ceo_energemsier + 1,818]

Japan’s largest refiner, JXTG Nippon Oil & Energy, is replacing Iranian oil with incremental supplies from Saudi Arabia among others, Tsutomu Sugimori, president of parent JXTG Holdings said Monday.

The US recently decided not to extend sanction waivers on the import of Iranian oil beyond May 2. Japan was among the eight countries affected.

“We too have stopped importing [Iranian oil] from May on,” Sugimori said at an earnings press conference in Tokyo. The impact on supply from ending oil imports from Iran has so far been “fairly limited,” Sugimori said, adding that Iranian barrels were “replaceable, and we have finished alternative procurements.”

But JXTG still sees Iran as an important supply source for both itself and Japan, he said, adding that it still hopes to import Iranian crude in the future.

JXTG, which had a 48.2% share of Japan’s oil products demand in fiscal 2018-2019 (April-March), has a combined 1.93 million b/d of installed refining capacity across 11 refineries in Japan.

FUJI OIL, COSMO OIL MOVE TO REPLACE IRANIAN CRUDE

On May 9, Fuji Oil President and CEO Atsuo Shibota said Iranian oil accounted for over 20% of its crude requirements in fiscal 2018-19, forcing the company to seek alternatives through spot and term deals. Shibota added that Fuji Oil would ensure the same quality of its oil products supply from blending different grades of crude while it was unable to use Iranian oil.

Fuji Oil’s exposure to Iranian oil amounted to around 30,000 b/d, based on its crude distillation capacity of around 143,000 b/d at the sole Sodegaura refinery in Tokyo Bay, according to S&P Global Platts calculations. Speaking separately on May 9, Takayuki Uematsu, director and senior executive officer of Cosmo Energy Holdings, the parent of refiner Cosmo Oil, said the Japanese refiner was considering procuring alternative supplies to Iranian oil, mainly from the Middle East.

“Iranian [supplies] accounted for about 5% of our imports,” Uematsu said at an earnings press conference.

JXTG TO SUPPLY IMO-COMPLIANT BUNKER FUEL FROM OCT

JXTG, which accounts for 40-50% of domestic bunker fuel supply, is also ready to start supplying bunker fuel by October that complies with International Maritime Organization regulations that take effect from January 1, 2020, Sugimori said at the press conference.

“We are now confident about our supply system for providing IMO-compliant fuels,” Sugimori said.

Asked whether the company saw US crude supply as one of the alternative to Iranian oil, Sugimori told reporters after the press conference that “JXTG is increasing its procurements from the US…it also sees benefits of US oil as it would need to buy more lighter oil for its response to the IMO regulations.” The IMO will cap global sulfur content in marine fuels at 0.5% from January 1 next year, down from 3.5% now. This applies outside the designated emission control areas where the limit is already 0.1%. Shipowners will have to either burn cleaner, more expensive fuels or install scrubbers if they continue to burn high sulfur fuel oil to comply with the rule.

STABLE DOMESTIC SUPPLY, DEMAND BALANCE JXTG does not expect a major fundamental change Japan’s supply and demand balance in fiscal 2019-20, with the emergence of another refiner holding a 30% share in the domestic oil products market, Sugimori said.

“I do not expect to see the [domestic] supply and demand balance to be loosened [in a market where] major refiners with a 50% share and a 30% share would likely be producing in line with demand” Sugimori said.

On April 1, Showa Shell became a wholly owned subsidiary of refiner Idemitsu Kosan through a share exchange, and the consolidated companies account for roughly 30% of Japan’s oil products market.

Sugimori added that he expects JXTG’s average refinery run to be about 90-95%, excluding the impact of refinery turnarounds, in 2019-20 as its refinery run rate is closely tracking overseas markets for oil products exports despite bearish domestic demand.

[Ward Smith + 6,615]

On 5/9/2019 at 11:09 AM, D Coyne said:

I tend to go with the data I see, Saudi C+C output for any 12 month period since 1973 has never been higher than 10.46 Mb/d, when they demonstrate that they can produce more than this for any 12 month period, then I will believe it.  In the mean time I consider the Saudi capacity for sustained (12 month average) C+C output to be 10.46 Mb/d until proven otherwise.  This is based on EIA OPEC output data for C+C.

You bring up some valid points. One I've asked about before here. My suspicion is the difference is made up by crude in storage. When I asked before about Saudi storage someone answered with offshore storage in other countries that belonged to Saudis. I'm still interested to know how much they have in country as well, but suspect it could be every bit as large as our Strategic Oil Stockpile, or about 700 million bbls. We hold probably that much again in private hands in Cushing and elsewhere. 

[ceo_energemsier + 1,818]

6 minutes ago, Ward Smith said:

You bring up some valid points. One I've asked about before here. My suspicion is the difference is made up by crude in storage. When I asked before about Saudi storage someone answered with offshore storage in other countries that belonged to Saudis. I'm still interested to know how much they have in country as well, but suspect it could be every bit as large as our Strategic Oil Stockpile, or about 700 million bbls. We hold probably that much again in private hands in Cushing and elsewhere. 

They could very well have that much in their strategic reserves located across the country within close proximity to non AG ports and export facilities. During the late 80s and into the 90s that had a very strong push to develop these highly secret sites and they used a lot of experienced mining companies from Europe from countries that were favorable to them. They spent a lot of $$$ developing these. Recall visiting several sites and it was amazing to see what they had  done. I am not aware of further developments after the mid 2000s if they expanded the capacities or not.

KSA used to have leases on large storage facilities in the Carib., NWE (The Nederlands, Germany) and in the Euro-Med directly leased or indirectly leased through operating companies. They also acquired storage capacity in Japan. Japan lets Aramco store about 8.5 mil bbls of crude in Japan for free as long as Japan gets the crude first in an emergency.

ADNOC also has a similar arrangement with Japan for storing 6mil bbls of crude.

KSA has an agreement with India to develop their strategic reserves.

They also maintain storage in China and in Singapore as well as when needed floating storage.

They have directly owned and equity storage in the US through Motiva and probably have additional leased facilities.

[ceo_energemsier + 1,818]

23 minutes ago, Ward Smith said:

You bring up some valid points. One I've asked about before here. My suspicion is the difference is made up by crude in storage. When I asked before about Saudi storage someone answered with offshore storage in other countries that belonged to Saudis. I'm still interested to know how much they have in country as well, but suspect it could be every bit as large as our Strategic Oil Stockpile, or about 700 million bbls. We hold probably that much again in private hands in Cushing and elsewhere. 

https://csnews.com/sunoco-build-oil-tanks-motiva-refinery

http://www.tankstoragemag.com/display_news/9830/Saudi_Aramco_retains_terminal_assets_from_Motiva_Enterprise/

[ceo_energemsier + 1,818]

40 minutes ago, Ward Smith said:

You bring up some valid points. One I've asked about before here. My suspicion is the difference is made up by crude in storage. When I asked before about Saudi storage someone answered with offshore storage in other countries that belonged to Saudis. I'm still interested to know how much they have in country as well, but suspect it could be every bit as large as our Strategic Oil Stockpile, or about 700 million bbls. We hold probably that much again in private hands in Cushing and elsewhere. 

https://www.ibtimes.co.in/indias-strategic-petroleum-reserves-programme-attracts-overseas-players-785268