DUBAI (Reuters) – Iran rejected accusations by the United States that it was behind attacks on Saudi oil plants that risk disrupting world energy supplies and warned on Sunday that US bases and aircraft carriers in the region were in range of its missiles.
Yemen’s 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 US Secretary of State Mike Pompeo said the assault was the work of Iran, a Houthi ally.
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 $5-10 per barrel on Monday as tensions rise in the Middle East.
Iranian foreign ministry spokesman Abbas Mousavi dismissed the US allegation as “pointless”. A senior Revolutionary Guards commander warned that the Islamic Republic was ready for “full-fledged” war.
“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 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, 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. A source close to the matter told Reuters the return to full oil capacity could take “weeks, not days”.
Another source briefed on the developments said Saudi oil exports would continue to run as normal this week thanks to large storage in the kingdom.
But it remains unclear how long the oil production shut down will continue, because the damage to the infrastructure “was big” and could not be fixed overnight, the source added.
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 its stocks 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.