Saudi Arabia oil attack: “We are locked and loaded” – Trump

Donald Trump has said the US is “locked and loaded” and ready to respond to attacks on a petroleum processing facility in Saudi Arabia, as US officials said the evidence pointed to Iranian involvement.

The US president did not mention Iran, but wrote on Twitter that he had “reason to believe that we know the culprit” behind the series of attacks on the Abqaiq facility, which is the world’s largest petroleum processing plant. The attacks disrupted more than half of the kingdom’s oil output and will affect global supplies.

Trump tweeted: “[We] are locked and loaded depending on verification, but are waiting to hear from the Kingdom [of Saudi Arabia] as to who they believe was the cause of this attack and under what terms we would proceed!”

It is the first time the president has hinted at a potential American military response.

The US government produced satellite photos showing what officials said were at least 19 points of impact at two Saudi energy facilities, including damage at the heart of the kingdom’s crucial oil processing plant at Abqaiq. Officials told US media the photos show impacts consistent with the attack coming from the direction of Iran or Iraq, rather than from Yemen to the south. Iraq denied that its territory was used for an attack on the kingdom. US officials said a strike from there would be a violation of Iraq’s sovereignty.

The US officials said additional devices, which apparently didn’t reach their targets, were recovered northwest of the facilities and are being jointly analysed by Saudi and American intelligence. The officials, who spoke on condition of anonymity to discuss intelligence matters, did not address whether the weapons could have been fired from Yemen, then taken a round-about path, but did not explicitly rule it out.

Oil prices rose in the wake of the attack to reach six-month highs on Monday, with gains of as much as 20%. Brent crude oil, the international benchmark, gained almost $12 a barrel reaching up to $71.95 a barrel, before dropping back to $68 a barrel.

The US secretary of state Mike Pompeo claimed over the weekend that Iran was responsible for the attack, which was claimed by Yemen’s Iran-aligned Houthi rebel group. Pompeo said there was no evidence the weapons were launched in Yemen and accused Iran of “an unprecedented attack on the world’s energy supply”.

Iran has denied allegations of responsibility. Its foreign ministry spokesman Abbas Mousavi said of Pompeo’s comments that “such fruitless and blind accusations and remarks are incomprehensible and meaningless.”

Iranian officials have also warned that US military assets in the region are within range of its missiles. “Having failed at ‘max pressure’, [Pompeo is] turning to ‘max deceit’,” the Iranian foreign minister, Javad Zarif, wrote on Twitter.

As the diplomatic crisis deepened, Trump tweeted that reports he had been willing to meet with Hassan Rouhani, the Iranian president, before the attacks were false. “The Fake News is saying that I am willing to meet with Iran, ‘No Conditions.’ That is an incorrect statement (as usual!),” he tweeted on Sunday.

But political commentators were quick to point out that those comments came from Pompeo and treasury secretary Steve Mnuchin, who five days ago said on camera that Trump was willing to meet with Rouhani with “no preconditions” at the upcoming United Nations General Assembly in New York.

On Monday Mousavi said no plans had been made for Trump and Rouhani to meet.

Over the weekend a senior commander from Iran’s Revolutionary Guards warned that the Islamic republic was ready for “full-fledged” war.

“Everybody should know that all American bases and their aircraft carriers in a distance of up to 2,000km 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.

Saudi de facto ruler Crown Prince Mohammed bin Salman has said the kingdom was “willing and able” to respond to this “terrorist aggression.”

Inflamed fears about Middle East tensions and worsening relations between Iran and the United States, powered safe-haven assets, with gold up 1% to $1,503.4 per ounce.

“The bigger issue is what premium markets will build in to reflect the risk of further attacks,” said Kerry Craig, Global Market Strategist, J.P. Morgan Asset Management.

“In the very near-term, we may also see a pick-up in safe-havens. Central banks are likely to look through the inflationary impact of higher oil prices but the added geopolitical risk to an already fragile backdrop will not go without notice.”

Saudi Arabia’s oilfields and pipelines have been targeted by rebels over the past year but never on such a scale and causing such disruption. Analysts warned that global supplies of oil are likely to suffer a “major jolt” following the attack. Aramco said the attacks would cut output by 5.7m barrels a day, more than 5% of global crude supply.

No casualties were reported but the full extent of the damage from Saturday’s attack was not clear, nor the type of weapons used, and reporters were kept away from the plants amid beefed-up security.

Aramco also said it will dip into its reserves to offset the disruption. On Saturday, CEO Amin Nasser said that “work is underway” to restore production, but the incident could affect investor confidence ahead of Aramco’s stock market debut.

A significant volume of oil production can be restored within days but the company would need weeks to reach full output again, Bloomberg News reported on Sunday, citing unnamed sources.

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