Iran refutes 'meaningless' US accusations over attacks on Saudi oil facilities

This image provided on Sunday Sept. 15 2019 by the U.S. government and Digital Globe and annotated by the source shows damage to the infrastructure

This image provided on Sunday Sept. 15 2019 by the U.S. government and Digital Globe and annotated by the source shows damage to the infrastructure

Iran on Sunday dismissed as "meaningless" U.S. accusations it was behind drone attacks on Saudi oil installations, suggesting Washington was seeking a pretext to retaliate against the Islamic Republic.

"China has a Strategic Petroleum Reserve and commercial crude storage, while Korea and Japan have IEA reserves to fall back on", Wood Mackenzie research director Vima Jayabalan said.

"Amid all the calls for de-escalation, Iran has now launched an unprecedented attack on the world's energy supply", he said. It said that the market is used to attacks on pipelines in war zones which are "easily repaired" in just hours or days.

White House adviser Kellyanne Conway told Fox News Sunday that the U.S. Energy Department could also tap its Strategic Petroleum Reserve to sell oil on the world market to stabilize the global energy supply.

"But [US President Donald] Trump has already shown he is willing to pursue a maximum pressure campaign even when oil prices spike".

USA crude oil jumped $5.61 per barrel, or 10.2%, to $60.46 per barrel in electronic trading on the New York Mercantile Exchange. By 1100 GMT, the contract was at $65.38, up $5.16, or 8.6%.

The U.S. has a cushion because it and Canada both produce plenty of oil, leaving the U.S. less reliant on the Middle East.

US crude added $4.79 per barrel, or 8.7%, to $59.63 per barrel in electronic trading on the New York Mercantile Exchange.

The Saturday strikes on national energy giant Aramco's Abqaiq processing plant and Khurais oil field knocked 5.7 million barrels per day (bpd) off production, over half of the OPEC kingpin's output, sending shockwaves through markets.

This image provided on Sunday Sept. 15 2019 by the U.S. government and Digital Globe and annotated by the source shows damage to the infrastructure
This image provided on Sunday Sept. 15 2019 by the U.S. government and Digital Globe and annotated by the source shows damage to the infrastructure

The attacks have possibly curtailed as much as one million barrels per day of Aramco's refining capacity, Energy Aspects said, although this could not be confirmed and it was not clear to which Saudi Aramco refineries it was referring. The latest OPEC figures put total Saudi production at 9.8 million barrels per day.

Saudi Arabia is racing to restore operations at two Saudi Aramco oil plants that were hit by drone attacks on September 14.

Trump said the US had reason to believe it knows who was behind the attack - his secretary of state had blamed Iran the previous day.

"There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom", Trump said Sunday evening referring to the Kingdom of Saudi Arabia.

The U.S., Western nations, their Gulf Arab allies and U.N. experts say Iran supplies the Houthis with weapons and drones - a charge that Tehran denies. The official spoke on condition of anonymity to discuss the internal deliberations. However, the president said he pulled back from retaliating against Iran at the last minute.

Yemen's Iranian-backed Houthi rebels claimed to have carried out the attack, but Washington has blamed Iran itself.

Iranian foreign ministry spokesman Abbas Mousavi dismissed Mr Pompeo's remarks as "blind and futile comments".

Prices came off their peaks after U.S. President Donald Trump authorized the use of his country's emergency stockpile to ensure stable supply.

Stabilization means processing so-called sour crude oil into sweet crude. Countries attacking each other's oil facilities and fields is a "prescription for a high oil price". The most recent time was in 2011 amid unrest in Libya that toppled longtime strongman Moammar Gadhafi.

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