Iran dismisses U.S. claim it was behind Saudi oil attacks, says ready for war

DUBAI (Reuters) – Iran dismissed accusations by the United
States that it was behind attacks on Saudi oil plants that
disrupted world oil production 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. But U.S. Secretary of State Mike Pompeo said there was no
evidence the attacks came from Yemen and accused Iran of “an
unprecedented attack on the world’s energy supply.”

Iranian foreign ministry spokesman Abbas Mousavi, speaking on
state TV, dismissed the U.S. claim as “pointless”. A senior
Revolutionary Guards commander warned that the Islamic Republic was
ready for “full-fledged” war and that U.S. military assets were
within range of Iranian missiles.

“Everybody should know that all American bases and their
aircraft carriers in a distance of up to 2,000 kilometers around
Iran are within the range of our missiles,” the head of the
Revolutionary Guards Corps Aerospace Force Amirali Hajizadeh was
quoted as saying by the semi-official Tasnim news agency.

State-run oil company Saudi Aramco said the strikes would cut
output by 5.7 million barrels per day, or more than 5% of global
crude supply, at a time when Aramco is gearing up for a stock
market listing.

Aramco gave no timeline for when output would resume 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”.

The kingdom, the world’s top oil exporter, ships more than 7
million barrels of oil to global destinations every day, and for
years has served as the supplier of last resort to markets.

The United States said it was ready to tap its emergency oil
reserves if needed after the attack on two oil plants, including
the world’s biggest petroleum processing facility in Abqaiq.

Saudi Arabia’s stock market opened down 2.3% on Sunday. Saudi
petrochemical companies, including Saudi Basic Industries (SABIC),
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 directly blame any party for
Saturday’s pre-dawn strikes, which they said involved drones, but
the energy minister linked it to a series of attacks on Saudi oil
assets and crude tankers in Gulf waters.

SAUDI READY TO ACT
U.S. Secretary of State Mike Pompeo said there was no evidence the
attacks came from Yemen, where a Saudi-led military coalition has
been battling the Houthis for over four years in a conflict widely
seen as a proxy war between regional rivals Sunni Muslim Saudi
Arabia and Shi’ite Iran.

Riyadh has accused Iran and its proxies of being behind previous
attacks claimed by the Houthis on oil pumping stations and Shaybah
oilfield, charges Tehran denies.

Some Iraqi media outlets said the attack originated from Iraq,
where Iran-backed paramilitary groups have wielded increasing power
but Iraq denied this on Sunday and vowed to punish anyone who
intended to use Iraq as a launchpad for attacks in the region.

Regional tensions have escalated after Washington quit an
international nuclear deal and extended sanctions on Iran to choke
off its vital oil exports, a move supported by U.S. Gulf allies
Saudi Arabia and the United Arab Emirates.

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 later in September.
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”.

Turkey, an ally of Iran, condemned the attack but called for
avoiding “all sorts of provocative steps” that could damage
regional security and stability, the foreign ministry said.

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 rising tensions with Iran and Western
criticism of the Yemen war, in June scaled down its military
presence, leaving Riyadh to try to neutralize the Houthis to
prevent Iran from gaining influence along its border.

The conflict has been in military stalemate for years. The
alliance has air supremacy but has come under international
scrutiny over civilian deaths and a humanitarian crisis that has
seen Yemen pushed to the brink of famine.

The Houthis, who have proved better at guerrilla warfare, have
stepped up missile and drone attacks on Saudi cities, complicating
U.N. peace efforts to end the war. Riyadh accuses Iran of arming
Houthis, a charge both of them deny.

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