NEW YORK (Pakistan Point News / Sputnik - 12th October, 2019) Saudi Arabia has not been interested in an attack on the Iranian oil tanker because instability in the Persian Gulf would hurt the upcoming public listing of the kingdom's state oil company Saudi Aramco, John Kilduff, a founding partner at New York-based energy hedge fund Again Capital, told Sputnik.
On Friday, Iranian media reported that an explosion had set the National Iranian Oil Company's tanker on fire 60 miles from the Saudi port city of Jeddah, suggesting it was a terrorist attack. The Iranian Foreign Ministry subsequently said that an oil tanker had suffered two attacks with an interval of around 30 minutes in the Red Sea and had been damaged.
"Between now and the next six months at least, as the listing gets underway and the stock price is closely watched, the Saudis will be praying for calm in the Gulf. They would want higher oil prices but not via a war that will make the security of shipping in the Gulf questionable," Kilduff said.
Kilduff believes it was understandable that some suspected Saudi involvement in the missile attack on the vessel that occurred in the Red Sea off the coast of Jeddah, as it came weeks after the September 14 air assault on Saudi oil facilities that the United States and Riyadh blamed on Iran. Tehran has denied the accusations while the Yemeni Houthi rebel movement claimed responsibility for the attack.
Kilduff explained it would not be logical for Riyadh to carry out an attack that only served to heighten tensions in the Gulf.
Media have reported that Saudi Crown Prince Mohammed Bin Salman Al Saud, often referred to by his initials MbS, wants a $2 trillion pre-listing valuation for Saudi Aramco. But the company executives working on the planned initial public offering were suggesting a more realistic $1.5 trillion valuation, which would still make it the world's largest IPO, the Wall Street Journal reported on Thursday.
"As Crown Prince MbS has taken great pains to tell the world, he wants a peaceful solution to the tensions in the middle East and we can all see why. The Aramco listing is super important to the Saudis now and the last thing they want is another huge uncertainty about their ability to produce and export their oil amid intense risk in the Persian Gulf," Kilduff said.
Tensions in the Persian Gulf have already caused oil tanker rates to spike. The American Shipper website reported earlier this week that estimates for the Middle East Gulf-to-Asia trade lanes have risen to $158,000-$162,000 per day, from $98,400 a week earlier. Some individual bookings were at higher levels, it said.
"That's not good news for all crude shippers, Aramco included," Kilduff stressed.
In a late September interview with the CBS television network, the crown prince said a wider conflict with Iran could cause crude prices to spike to "unimaginably high numbers" and the global economy to collapse. The crown prince also said he preferred a political and peaceful solution to tensions with Iran over a military option.
