RIYADH – The weapons used to strike Saudi oil facilities were Iranian-made,the Riyadh-led coalition said Monday, heightening fears of regionalconflict after the US hinted at a military response to the assault.
The weekend strikes on Abqaiq –- the world’s largest oil processingfacility –- and the Khurais oil field in eastern Saudi Arabia have roiledglobal energy markets sending prices spiking Monday.
Yemen’s Iran-aligned Huthi rebels claimed responsibility for the strikesbut Washington has squarely blamed Iran, with President Donald Trump sayingthe US is “locked and loaded” to respond.
Saudi’s energy infrastructure has been hit before, but this strike was of adifferent order, abruptly halting 5.7 million barrels per day (bpd) orabout six percent of the world’s oil supply.
The Saudi-led coalition, which is bogged down in a five-year war inneighbouring Yemen, reiterated the assessment that the Huthis were notbehind it, pointing the finger at Iran for providing the weapons.
Russia urged “all countries to avoid hasty steps or conclusions that couldexacerbate the situation” while the European Union stressed all sidesshould show “maximum restraint”.
China also called on the US and Iran to “exercise restraint… in theabsence of a conclusive investigation or verdict.”
“All indications are that weapons used in both attacks came from Iran,”coalition spokesman Turki al-Maliki told reporters in Riyadh, adding theywere now probing “from where they were fired”.
“This strike didn’t come from Yemen territory as the Huthi militia arepretending,” Maliki said, adding an investigation had been opened.
He labelled the Huthis “a tool in the hands of the Iranian RevolutionaryGuards and the terrorist regime of Iran”.
The rebels said they fired 10 drones at the Saudi infrastructure, but theNew York Times reported that US officials had satellite images showing theattacks — possibly with drones and cruise missiles — had come from thenorth or northwest.
That indicated they were sourced in the northern Persian Gulf, Iran orIraq, rather than Yemen.
– ‘Unprecedented attack’ –
The assault on the heart of Saudi Arabia’s oil industry, which engulfed thefacilities in flames, has been condemned by Washington as an “unprecedentedattack on the world’s energy supply”.
Oil prices saw their biggest daily gain since the 1991 Gulf War on Mondayafter the attacks halved output in the world’s top crude exporter, fuellingfresh geopolitical and growth fears.
Europe’s benchmark Brent crude surged by 20 percent and US counterpart WTIby 15 percent as commodities trading got underway.
Both contracts later came off their peaks, but were still up more than 10percent on the day by the mid-afternoon in Europe.
US Energy Secretary Rick Perry insisted world oil markets still hadsizeable reserves saying the market has “a fairly substantial amount of oilout there available”.
Saudi Energy Minister Prince Abdulaziz bin Salman on Sunday said thekingdom would use its vast inventories to partially compensate for the lostproduction, and the US also authorised the release of its reserves.
“Growing tensions in the Middle East are another headwind for the globaleconomy in already uncertain times, and a full-blown conflict could triggeranother leg in the global downturn,” said Jennifer McKeown, head of GlobalEconomics at Capital Economics.
With the Huthis threatening further attacks, analyst Oanda senior marketanalyst Craig Erlam noted Saturday’s events had “highlighted thevulnerability of security at these facilities to drone attacks”.
The kingdom also has a spare capacity of around two million bpd that it candraw on at times of crisis.
But a prolonged production delay could potentially see prices climb to”triple digits”, warned Saudi economic consultant Sulaiman al-Assaf.-APP/AFP