China opposes action against Iran after attacks on Saudi oil fields

Galtero Lara
Setiembre 16, 2019

An Iranian official responded Sunday after U.S. Secretary of State Mike Pompeo pointed at the nation's government in Tehran following Saturday's drone attacks on Saudi Arabia oil facilities.

The attacks knocked down 5.7 million barrels per day of crude production - more than half of Saudi Arabia, the top exporter's output - or over five percent of global oil supply.

Trump on Sunday also announced he had authorized the use of the U.S.'s petroleum reserve in response to the Saudi attacks, adding that the USA was "locked and loaded" as they awaited confirmation of who was behind them.

The Houthis, which are backed by Iran and control a large portion of Yemen, on Saturday claimed responsibility for the attack on Saudi Arabia's Aramco oil fields.

Russian Federation on Monday urged countries in the Middle East and outside the region not to draw "hasty conclusions" on who staged the attacks on Saudi oil facilities. Haven assets including gold, the yen and Treasuries surged on concern over the geopolitical fallout from the attacks.

Iranian foreign ministry spokesman Abbas Mousavi, speaking on state TV, dismissed the USA allegation as "pointless". Saudi officials said no workers were killed or injured in the attacks.

For one, Saudi Arabia's stock market dropped approximately 2.3% on Sunday GMT+3.

South Korea has already said it would consider releasing oil from its strategic reserves. USA gasoline futures jumped nearly 13 per cent.

The energy minister said Aramco "is now working to recover the lost quantities" of oil and will update the public within two days.

The Saudis have been at war with the Houthi rebels since early 2015.

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The US accusations triggered angry retorts from Iran, which said they were created to act as a pretext for future hostile actions against the Islamic Republic.

Trump said he would release oil from the U.S. Strategic Petroleum Reserve in response to the attacks potentially impacting oil prices.

Oil prices fell on Friday, with Brent crude, the global price benchmark slipping 0.3% to close at $60.22 per barrel.

Taking to microblogging site Twitter, the US President also suggested that America "knows the culprit" behind the attack on Saudi Arabia facilities.

The Kingdom is focusing on restoring the production at the two plants as the Saudi bourse slumped 3 percent as the week's trading began on September 15 morning.

Separately on Monday, three trade sources told Reuters that Saudi Aramco's trading arm was looking for oil products for prompt delivery following Saturday's attacks.

He was referring to the Trump administration's stated "maximum pressure campaign" which has targeted Iran with sanctions since Washington pulled out of an worldwide agreement to limit the scope of Iran's nuclear programme.

Saudi Arabia and the USA both blamed Iran for attacks in the Gulf on two oil tankers in June and July, allegations Tehran denied.

While Iran has denied blame for the attacks, its Yemeni allies have promised more strikes to come.

The attack on the facility could have significant implications for the oil shipping industry as Abqaiq's facilities depressurise, desulphurise, and de-gas crude production, rendering it safe for pipeline transport to Saudi Arabia's east and west coast export terminals.

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