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Saudi Arabia drone attacks and trilateral coordination

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Things often change overnight and what used to be right becomes wrong. Until last week, oil producers feared cheap oil. Now, world crude oil prices are violently fluctuating after Saturday’s drone attacks, which set ablaze two major oil installations in Saudi Arabia.

Yes, this is the Middle East that I have known for the past 41 years.

Usually reticent petroleum experts suddenly spoke out. Some said the attacks would only cause short-term disruption, predicting no serious impact on energy markets and the world economy. Others, on the contrary, stated that the drone strikes against the Abqaiq and Kurais facilities would be a recipe for $100 per barrel oil.

The situation, however, does not warrant such pessimism. Saudi Arabia and the Western nations have 30 to 60 days of strategic oil reserves — more than enough to prevent a short-term disruption in the market. Crude oil prices may rise for a while but will eventually stabilize. This, fortunately, was not my most serious nightmare regarding the Persian Gulf, for the following reasons:

First, who did it. Yemen’s Houthi rebels claimed responsibility, but nobody in Tokyo believes that. Washington first blamed the Islamic Republic of Iran for being behind the attacks. Everybody in Tokyo knew, however, that Tehran would never admit it, as was the case when a Japanese tanker was attacked near the Strait of Hormuz on June 13.

Second, no matter who launched........

© The Japan Times