Pence says attacks against allies, global energy supply will fail

Oil prices surged almost 20% on Monday after the attack on the world's top oil exporter, which has been the supplier of last resort for decades.

The worldwide benchmark, Brent crude, fell nearly 7% to $64.6 a barrel.

WTI for October slid $3.48 to $59.42 a barrel, after declining as much as 5.6% The U.S. benchmark's discount to Brent for the same month narrowed to $5.54.

"During the past two days the damage was contained and 50 percent of the production has been recovered", he added.

Details about the attacks, which were initially claimed by Houthi rebels battling the Saudi-led coalition in Yemen, remain unclear.

On the same day, Saudi officials said they believe the weapons used in the attack were made in Iran - and that they were working to determine where they had been launched from.

But the USA has tried to build its case that Iran was behind the attacks, which have raised new war worries and sent energy prices soaring.

They threaten to drag the United States further into the Greater Middle East. "If the evidence points to direct Iranian involvement, it would constitute an unprecedented escalation".

To reverse Iran's retaliatory moves and launch broader talks covering its ballistic missiles and regional behaviour, as Trump demands, Macron has suggested a multi-billion-dollar credit line to enable Tehran to ease an economic crisis wrought by USA sanctions that have decimated Iran's vital oil trade. On Monday, Trump said the US was "locked and loaded" but waiting to hear from the Saudis before taking any action.

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He said political effects and concerns about global trade tensions rather than levels of supply and demand were affecting the market.

While it has built its own missile arsenal, experts say Iran's armed forces would suffer in a head-to-head military confrontation.

Saudi authorities were also bullish on plans for the mega stock listing of oil giant Aramco, which was thought to be imperilled by the attack.

Saudi Arabia is the world's biggest oil exporter, shipping more than seven million barrels daily.

People briefed on the extent of the damage at Abqaiq, which processes more than 70 per cent of the kingdom's normal output, have warned it could take months before full production is restored.

Trump said on September 16 that it was increasingly "looking like" Iran was behind the attack on Saudi Arabian oil facilities, but said it was still too early to be sure. He also wants Iran to stop supporting regional proxies, including the Houthis.

Unnamed U.S. officials said satellite photos showed 19 points of impact at several facilities that they said came from the north and northwest - from the direction of Iran or Iraq - not from Huthi-held territory in Yemen.

The apparent hardening of the USA position came as Iran's supreme leader ruled out negotiations with Washington "at any level". If Iran conducted Saturday's attacks to pressure Trump to back off his sanctions regime against Tehran, they will fail, Pence said. While thus far failing to endorse U.S. charges of Iranian responsibility, they could, by means of the attack on Saudi Arabia, be swung behind the United States drive to war.

For its part, Iran only claimed one attack during this period, the shootdown of a United States military surveillance drone it alleges entered its airspace on June 20.

He stressed, however, that military retaliation was not yet on the table in response to the strike against a key U.S. Mideast ally.

  • Delia Davidson