DUBAI - Iran dismissed accusations by the
United States that it was behind attacks on Saudi oil plants
that risk disrupting global energy supplies and warned on Sunday
that U.S. bases and aircraft carriers in the region were in
range of its missiles.
Yemen's Iran-aligned Houthi group claimed responsibility for
Saturday's attacks that knocked out more than half of Saudi oil
output or more than 5% of global supply, but U.S. Secretary of
State Mike Pompeo accused Iran of the attack on the world's
energy supply.
The drone strikes on plants in the heartland of Saudi
Arabia's oil industry, including the world's biggest petroleum
processing facility, were expected to send oil prices up $3-$5
per barrel on Monday as tensions rise in the Middle East.
Iranian foreign ministry spokesman Abbas Mousavi, speaking
on state TV, dismissed the U.S. allegation as "pointless". A
senior Revolutionary Guards commander warned that the Islamic
Republic was ready for "full-fledged" war.
"Everybody should know that all American bases and their
aircraft carriers in a distance of up to 2,000 kilometres around
Iran are within the range of our missiles," the semi-official
Tasnim news agency quoted commander Amirali Hajizadeh as saying.
State oil giant Saudi Aramco said the attack cut output by
5.7 million barrels per day, about half the kingdom's
production, at a time when Aramco is trying to ready itself for
what is expected to be the world's largest share sale.
Aramco gave no timeline for output resumption but said early
Sunday it would give a progress update in around 48 hours. A
source close to the matter told Reuters the return to full oil
capacity could take "weeks, not days".
Traders and analysts said crude may spike to as high as $100
if Riyadh fails to quickly bring back supply.
The kingdom, the world's top oil exporter, ships more than 7
million barrels of oil to global destinations every day.
Riyadh said it would compensate for the loss by drawing on
reserves which stood at 188 million barrels in June, according
to official data. The United States said it was also ready to
tap emergency oil reserves if needed.
The Saudi bourse opened down 2.3% on Sunday but later pared
some losses. Saudi petrochemical firms announced a significant
reduction in feedstock supplies.
"Abqaiq is the nerve center of the Saudi energy system. Even
if exports resume in the next 24-48 hours, the image of
invulnerability has been altered," Helima Croft, global head of
commodity strategy at RBC Capital Markets, told Reuters.
Saudi authorities have yet to blame any party for the
strike, but linked it to a recent series of attacks on Saudi oil
assets and crude tankers in Gulf waters.
SAUDI READY TO ACT
Pompeo said there was no evidence the attack came from
Yemen, where a Saudi-led coalition has been battling the Houthis
for over four years in a conflict widely seen as a proxy war
between rivals Sunni Muslim Saudi Arabia and Shi'ite Iran.
Riyadh has accused Iran and its proxies of being behind
previous attacks on oil pumping stations and the Shaybah
oilfield, charges Tehran denies.
Some Iraqi media outlets said the attack originated from
there, where Iran-backed paramilitary groups wield increasing
power. Iraq denied this on Sunday and vowed to punish anyone
using Iraq as a launchpad for attacks.
Regional tensions have escalated since Washington quit an
international nuclear deal and extended sanctions on Iran to
choke off its vital oil exports.
France, condemning Saturday's attack, said such actions "can
only worsen regional tensions and risk of conflict". Turkey, an
ally of Iran, called for the avoidance of "provocative steps"
that could harm regional stability.
The attack comes after U.S. President Donald Trump said a
meeting with Iranian President Hassan Rouhani was possible at
the United Nations General Assembly in New York this month.
Tehran ruled out talks until sanctions are lifted.
"Amid all the calls for de-escalation, Iran has now launched
an unprecedented attack on the world's energy supply," Pompeo
said in a Twitter post on Saturday.
Saudi de facto ruler Crown Prince Mohammed bin Salman told
Trump by telephone on Saturday that Riyadh was willing and able
to deal with the "terrorist aggression".
A senior Emirati official said the UAE, Riyadh's main
partner in the Western-backed military coalition in Yemen, would
fully support Saudi Arabia as the assault "targets us all".
The UAE, concerned about the rising tensions with Iran and
Western criticism of the war, has scaled down its military
presence in Yemen, leaving Riyadh to try to neutralise the
Houthis to prevent Iran from gaining influence along its border.
Riyadh accuses Iran of arming the Houthis, a charge both of
them deny.
Iran's foreign minister Mohammed Javad Zarif tweeted that
Washington and its allies were "stuck in Yemen" and that blaming
Tehran "won't end the disaster".
The conflict has been in military stalemate for years. The
alliance has air supremacy but has come under global scrutiny
over civilian deaths and a humanitarian crisis that has pushed
millions to the brink of famine.
The Houthis, more adept at guerrilla warfare, have stepped
up missile and drone attacks on Saudi cities, thwarting U.N.
peace efforts.