Iran rules out talks as Trump blames Tehran for Saudi oil attack

FAN Editor
Iran's Supreme Leader Ayatollah Ali Khamenei gives a speech to a group of scholars and seminary students of religious sciences in Tehran
Iran’s Supreme Leader Ayatollah Ali Khamenei gives a speech to a group of scholars and seminary students of religious sciences in Tehran, Iran September 17, 2019. Official Khamenei website/Handout via REUTERS

September 17, 2019

By Parisa Hafezi and Steve Holland

DUBAI/WASHINGTON (Reuters) – Iran’s supreme leader on Tuesday ruled out talks with Washington after President Donald Trump blamed Tehran for a crippling attack on Saudi Arabia’s oil facilities.

Saudi King Salman called on governments around the world to confront the threats to oil supplies and global economic stability posed by the weekend attack. European allies said the crisis should be addressed collectively.

Trump said on Monday that it looked like Iran was behind the strike at the heart of the Saudi oil industry, which cut 5% of global production, but stressed he did not want to go to war. Iran denied it was to blame.

“Iranian officials, at any level, will never talk to American officials … this is part of their policy to put pressure on Iran,” Iranian state TV quoted Ayatollah Ali Khamenei as saying.

He said talks could only take place if the United States returned to a nuclear accord between Iran and the West that Trump abandoned last year.

U.S.-Iran relations deteriorated after Trump quit the accord and reimposed sanctions over Tehran’s nuclear and ballistic programs. He also wants Iran to stop supporting regional proxies, including Yemen’s Houthi group, which has claimed responsibility for the attack.

A day after warning that the United States was “locked and loaded” to respond to the incident, Trump said on Monday there was “no rush” to do so and that Washington was coordinating with Gulf Arab and European states. “I’m not looking at options right now. We want to find definitively who did this.”

Britain and Germany agreed they needed to work with international partners to form a collective response and de-escalate tensions as efforts continued to establish exactly what happened, Prime Minister Boris Johnson’s spokesman said.

German Chancellor Angela Merkel said the Iran nuclear pact, which European parties are trying to salvage, is one building block “we need to get back to”.

Saudi Arabia, which has supported tougher U.S. sanctions on Iran, said an initial investigation showed the strikes were carried out with Iranian weapons. Despite the Houthi claim, the launch site was still being determined.

King Salman, heading a cabinet meeting on Monday, said Riyadh would handle the consequences of “cowardly attacks” that target vital Saudi installations, world crude supplies and global economic stability. The cabinet urged the world to confront those threats “regardless of their origin”.

Graphic for attacks on Saudi oil: https://graphics.reuters.com/SAUDI-ARAMCO/0100B29Q1C3/index.html

WORST ATTACK IN DECADES

The assault halved Saudi Arabia’s oil output and damaged the world’s biggest crude oil processing plant, triggering the largest jump in oil prices in decades. It was the worst such attack on regional oil facilities since Saddam Hussein torched Kuwait’s oil wells during the 1990-91 Gulf war.

The Saudi energy minister will hold a news conference Tuesday at 1715 GMT, giving what would be the first update since state oil giant Aramco announced on Sunday attacks on its plants in Abqaiq and Khurais had knocked out 5.7 million barrels per day.

It could take months for Saudi production to resume, sources briefed on Aramco’s operations have said.

Oil prices surged nearly 20% on Monday after the attack on the world’s top oil exporter, which has been the supplier of last resort for decades. Prices fell after the United States said it would release U.S. emergency supplies and producers said there were enough global stocks.[O/R]

Riyadh said it would meet customers’ demand from its ample storage. Aramco informed at least six refiners in Asia it would supply all allocated crude volumes in October.

Dollar-denominated bonds issued by the Saudi government and Aramco rebounded on Tuesday, in a sign investors’ concern may be abating.

Aramco is preparing for an initial public offering, although some investors and analysts think it may be delayed as it has not said when oil output will be restored.

LAUNCH SITE

Trump said he was sending Secretary of State Mike Pompeo to Saudi Arabia soon, but he had not made any commitments to protect the Saudis. “That was an attack on Saudi Arabia, and that wasn’t an attack on us. But we would certainly help them.”

Riyadh asked international experts to join its investigation, which indicates the attack did not come from Yemen, the foreign ministry said. U.S. officials say they believe it came from the opposite direction, possibly from Iran.

Iranian President Hassan Rouhani said Yemenis launched the strikes in retaliation for attacks by a Saudi-led coalition that has been battling the Houthis for four years. Riyadh says Tehran arms the group, which has fired missiles and drones on Saudi cities, a charge both deny.

The United Arab Emirates, a Saudi ally, rejected Rouhani’s attempt to “justify the unprecedented terrorist attack”.

“The attack on Saudi Arabia is a dangerous escalation in itself,” senior foreign ministry official Anwar Gargash tweeted.

Tehran has warned that if it cannot export oil then neither can other producers. But it has denied involvement in earlier attacks on tankers in Gulf waters and Saudi energy assets.

(Reporting by Parisa Hafezi and Steve Holland; Additional reporting by Reuters teams in London, Dubai, Riyadh, Cairo, Berlin, Paris, Singapore and New Delhi; Writing by Ghaida Ghantous; Editing by Giles Elgood)

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