The cost of petrol is set to soar after global energy prices spiked yesterday following an attack on oil facilities in Saudi Arabia caused the worst disruption to world supplies on record.
President Donald Trump warned that the US was “locked and loaded” to respond as US officials offered satellite images of the damage at the heart of the kingdom’s crucial Abqaiq oil processing plant and a key oil field, alleging the pattern of destruction suggested the attack came from either Iraq or Iran – rather than Yemen, as claimed by Iranian-backed Houthi rebels there.
Iran for its part called the US allegations “maximum lies”.
The Houthis yesterday warned of more attacks on Saudi oil facilities and urged foreign companies doing business in the kingdom to stay away from its energy sites.
- READ MORE: FTSE slips as Saudi Oil updates dry up
Yahia Sarie, a rebel spokesman, said facilities such as the Abqaiq oil processing plant and the oil field hit this weekend could again “be targeted at any time”.
In Vienna, US secretary of energy Rick Perry condemned what he called “Iran’s attack on the Kingdom of Saudi Arabia” in an address to the International Atomic Energy Agency’s general conference.
“This behaviour is unacceptable and they must be held responsible,” Mr Perry said of Iran.
“Make no mistake about it, this was a deliberate attack on the global economy and the global energy market.”
Initial investigations show Iranian weapons were used in the weekend attack on Saudi Arabian oil installations, a Saudi military spokesman has said.
Colonel Turki al-Malki told reporters in Riyadh on Monday that the early morning strikes on Saturday were not launched from Yemen as claimed by Iranian-allied Yemeni rebels who are at war with Saudi Arabia.
American officials earlier released satellite images of the damage at the heart of the kingdom’s crucial Abqaiq oil processing plant and a key oil field, alleging the pattern of destruction suggested Saturday’s attack came from either Iraq or Iran - rather than Yemen.
The Saudi military spokesman later made the same accusation, alleging “Iranian weapons” had been used in the assault.
Iran rejected the allegations, with a government spokesman saying now there was “absolutely no chance” of a hoped-for meeting between Iranian president Hassan Rouhani and US president Donald Trump at the UN General Assembly next week.
For his part, Mr Trump sent mixed signals, saying his “locked and loaded” government waited for Saudi confirmation of Iran being behind the attack while later tweeting that the US did not need Mideast oil, “but will help our Allies!”
The tensions have led to fears that action on any side could rapidly escalate a confrontation that has been raging just below the surface in the wider Persian Gulf in recent months.
There already have been mysterious attacks on oil tankers that Washington blames on Tehran, at least one suspected Israeli strike on Shiite forces in Iraq, and the downing of a US military surveillance drone by Iran.
Those tensions have increased ever since Mr Trump pulled the US out of Iran’s 2015 agreement with world powers that curtailed its nuclear activities and the US re-imposed sanctions on the country that sent its economy into freefall.
Benchmark Brent crude gained nearly 20% in the first moments of trading Monday before settling down to over 10% higher as trading continued.
That spike represented the biggest percentage value jump in Brent crude since the run-up to the 1991 Gulf War that saw a US-led coalition expel Iraqi dictator Saddam Hussein’s forces from Kuwait.
The attack halted production of 5.7 million barrels of crude a day, more than half of Saudi Arabia’s global daily exports and more than 5% of the world’s daily crude oil production. Most of that output goes to Asia.
At 5.7 million barrels of crude oil a day, the Saudi disruption would be the greatest on record for world markets, according to figures from the Paris-based International Energy Agency (IEA).
It just edges out the 5.6 million-barrels-a-day disruption around the time of Iran’s 1979 Islamic Revolution, according to the IEA.
Saudi Arabia has pledged that its stockpiles would keep global markets supplied as it rushes to repair damage at the Abqaiq facility and its Khurais oil field.
However, Saudi Aramco has not responded publicly to questions about its facilities.
Yemen’s Houthi rebels, who have been targeted by a Saudi-led coalition since March 2015 in a vicious war in the Arab world’s poorest country, maintain they launched 10 drones that caused the extensive damage.
They reiterated that Saudi oil sites remained in their crosshairs, warning foreign workers to stay away.
At a news conference on Monday, Saudi military spokesman Col Al-Maliki said the kingdom’s initial investigations showed “the terrorist attack did not come from Yemen as claimed by the Houthi militia”.
“This terrorist attack is a large-scale cowardly act, and as I said, targets the global economy and not just the kingdom,” Col Al-Malki said.
“All the indications and operational evidence, and the weapons that were used in the terrorist attack, whether in Buqayq or Khurais, indicate with initial evidence that these weapons are Iranian weapons.”
Col Al-Maliki offered no immediate evidence to support his allegations, which came after Mr Trump said the US awaited word from Saudi Arabia about who it suspected launched the attacks.
Iraqi premier Adel Abdel-Mahdi said he received a call on Monday from US Secretary of State Mike Pompeo, who confirmed that the attack did not come from Iraq.
The State Department did not immediately acknowledge what was discussed.
Iranian Foreign Ministry spokesman Abbas Mousavi again denied the US claims on Monday, telling journalists the accusation was “condemned, unacceptable and categorically baseless”.
Russia’s Foreign Ministry, while expressing “grave concern” about the attack, warned against putting the blame on Iran, saying that plans of military retaliation against Iran are unacceptable.
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