Oil prices surge 15% after attack on Saudi facility hits global supply

The drone attack Saturday on Saudi Arabia's Abqaiq plant and its Khurais oil field led to the interruption of an estimated 5.7 million barrels of the kingdom's crude oil production per day, equivalent to more than 5 per cent of the world's daily supply.

Oil prices saw a record surge Monday after attacks on two Saudi facilities slashed output in the world's top producer by half, fuelling fresh geopolitical fears as Donald Trump blamed Iran and raised the possibility of a military strike on the country.

Although the attacks on the two Saudi oil facilities were claimed by the Houthi rebels, Washington has immediately pointed the finger at Tehran, claiming that the attack was too complex and too devastating to be coordinated by the rebels.

"Today, witness that innocents die every day in Yemen ..."

Japan remains committed to "continuously engaging" with the region in cooperation with other countries to maintain and reinforce peace and stability in the Middle East, it said.

Iranian Foreign Ministry spokesman Abbas Mousavi on Sunday dismissed the US allegations as "blind and futile comments". Iran rejected the claim.

It's estimated the drone attack, claimed by Yemeni Houthi rebels, has cut production at the giant facility by almost six-million barrels a day, about five percent of global demand.

As markets closely watch Saudi Arabia's ability to get its industry back on track, Aramco CEO said Saturday that "work is under way" to restore full production. Bringing the entire plant back online may take weeks. Aramco told one Indian refinery that it would deliver crude from other sources and had adequate inventory, a refinery source said.

Riyadh said it would compensate for the damage at its facilities by drawing on its stocks, which stood at 188 million barrels in June, according to official data.

The Saudi bourse closed down 1.1 per cent on Sunday, with banking and petrochemical shares taking the biggest hit. Saudi petrochemical firms announced a significant reduction in feedstock supplies. "Even if exports resume in the next 24 to 48 hours, the image of invulnerability has been altered", Helima Croft, global head of commodity strategy at RBC Capital Markets, told Reuters.

According to USA government information, 15 structures at Abqaiq suffered damage on their west-northwest facing sides.

"The Secretary-General condemns Saturday's attacks on Aramco oil facilities in the Eastern Province in the Kingdom of Saudi Arabia claimed by the Houthis", according to a statement from spokesman Stephane Dujarric.

Yahia Sarie said 10 drones had been launched and warned that more attacks would take place.

The strike on the Saudi Arabian Oil Co. facility, which the United States blamed on Iran, knocked out roughly 5 per cent of the global supply.

Brent #oil up nearly 10%, after rising as much as 20%, after #SaudiArabia oil installation attack. But experts said the Saudis did not want open conflict with Iran. "You can't really come to a quick conclusion", he said. Iraq denied this on Sunday and vowed to punish anyone using Iraq as a launchpad for attacks. Regional tensions have escalated since Washington quit an global nuclear deal and extended sanctions on Iran to choke off its vital oil exports. Iran's ally Turkey called for the avoidance of "provocative steps".

The attack came after Trump said a meeting with Iranian President Hassan Rouhani was possible at the U.N. General Assembly in NY this month. Tehran ruled out talks until sanctions are lifted.

Conway told "Fox News Sunday" that Trump would "consider" following up on his suggestion of a meeting at the forthcoming UN General Assembly session in NY, adding that "the conditions must always be right for this president to make a deal or take a meeting".

The movement had threatened in May to attack 300 military targets in Saudi Arabia, the United Arab Emirates and Yemen.

But Iranian Foreign Minister Javad Zarif tweeted on Sunday to deride Mr Pompeo, saying that "having failed at max pressure, Sec Pompeo's turning to max deceit".

A civil war has raged in Yemen for five years, during which thousands have died and millions face starvation.

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