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Iran dismisses US allegation it was behind Saudi oil attacks

17 September 2019

It didn't immediately respond to requests for comment Monday.

The statement said the company is now working on restoring the lost quantities, and will present updated information within the next 48 hours. "That's really what's going to drive prices".

The attacks resulted in "the temporary suspension of production operations", Saudi Energy Minister Abdulaziz bin Salman said Sunday in a statement.

Iraq denied Sunday that its territory was used for an attack on the Kingdom and US officials said a strike from there would be a violation of Iraq's sovereignty.

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State energy producer Saudi Aramco lost about 5.7 million barrels per day of output after 10 unmanned aerial vehicles on Saturday struck the world's biggest crude-processing facility in Abqaiq and the kingdom's second-biggest oil field in Khurais, the company said. Identical marks are visible on the USA imagery. Futures paired those gains to trade up $6.47, or 11%, at $66.69 a barrel as of 6:48 a.m.in London. "If it's protracted it could be a big challenge for the oil markets".

"The Houthis must stop undermining Saudi Arabia's security by threatening civilian areas and commercial infrastructure", said the British government.

Saudi shares dropped three per cent at the start of trading Sunday, the first session after drone attacks on two major oil facilities knocked out more than half the kingdom's production.

One strike hit the oil company's Abqaiq facility, which is near Dammam in Saudi Arabia's Eastern Province, while another attack hit Khurais oil field.

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Saudi officials say they will take measures to offset any disruption to the global oil markets.

It's also set to escalate a showdown pitting Saudi Arabia and the US against Iran, which backs proxy groups from Yemen to Iran and Lebanon.

The attacks and recriminations are increasing already heightened fears of an escalation in the region, after a prominent US senator suggested striking Iranian oil refineries in response to the assault, and Iran warned of the potential of more violence. This comes amid an escalating crisis between the United States and Iran over its unravelling nuclear deal with world powers.

The Houthis, who are fighting Saudi-backed forces in Yemen, have claimed responsibility for most of the strikes against Aramco installations. Riyadh has built five giant underground storage facilities in various parts of the country that can hold tens of millions of barrels of various refined petroleum products, to be tapped during times of crisis.

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Saudi Arabia's 2.3 million bpd of effective spare capacity in August accounted for more than two-thirds of OPEC's on-hand supply of 3.2 million bpd, according to the International Energy Agency, with most of the rest from Kuwait and the United Arab Emirates. Aramco could consider declaring itself unable to fulfill contracts on some global shipments - know as force majeure - if the resumption of full capacity at Abqaiq takes weeks, people familiar with the matter said, asking not be identified before a public statement.

Iran dismisses US allegation it was behind Saudi oil attacks