Middle East drone attacks likely to raise gas prices

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President Trump says he’s ready to release oil from the strategic petroleum reserve if it’s needed. This follows drone attacks this weekend that crippled the world’s largest refinery.

Late Sunday, President Trump said the U.S. believes it knows the “culprit” behind this weekend’s drone attack on Saudi Arabia’s oil facilities and is “locked and loaded” depending on verification from the Saudi Kingdom.

But just a day earlier, Secretary of State Mike Pompeo put the blame squarely on Iran.

Secretary Pompeo has made clear that the Iranian regime is responsible for this attack on civilian areas and infrastructure vital to our global energy supply and we’re not going to stand for that,” said Kellyanne Conway, Counselor to the President.

Yemen’s Houthi rebels claimed responsibility for the attack while Iran denied Pompeo’s accusations and threatened its forces could strike U.S. military bases in the Middle East.

“I think Secretary Pompeo’s statements yesterday were absolutely right. I think it’s very clear this was the Iranians,” said Representative Liz Cheney, (R) Wyoming.

“I think it’s safe to say that the Houthis don’t have the capability to do a strike like this without Iranian assistance,” said Representative Adam Schiff, (D) Chair, House Intelligence Committee.

Saudi Arabia says the attack cut its oil supply in half, disrupting the production of 5.7 million barrels a day.

That has some experts warning oil prices could spike when markets open Monday.  

“If this is a prolonged supply problem, then yes, we have a major hit to oil markets,” said Karen Young, American Enterprise Institute.

The Energy Department says it “stands ready” to tap into the strategic petroleum oil reserves if necessary to offset any disruptions.

Economist Peter Morici says the longer it takes for Saudi Arabia to recover, prices at the pump could increase by as much as 50cents a gallon, though he says it’s unlikely.

“This is a temporary disruption. The only real threat is if we get into some uh conflict with Iran over it,” said Morici.

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