The weekend drone attack in Buqyaq on one of the world's largest crude oil processing plants that dramatically cut into global oil supplies
The weekend drone attack in Buqyaq on one of the world's largest crude oil processing plants that dramatically cut into global oil supplies (AP Photo/Amr Nabil)

Saudi drone attack ups tensions in region

A weekend drone attack on Saudi Arabia that cut into global energy supplies and halved the kingdom's oil production could fuel a crisis in the region, it has been claimed.

Iran has denied US allegations it launched the assault as tensions remained high over Tehran's collapsing nuclear deal.

Satellite photos suggested damage at the heart of the kingdom's crucial oil processing facility.

Iran called the US claims "maximum lies" while a commander in its paramilitary Revolutionary Guard reiterated its forces could strike US military bases across the Middle East with their arsenal of ballistic missiles.

A prominent US senator suggested striking Iranian oil refineries in response to the assault, claimed by Yemen's Iran-backed Houthi rebels, on Saudi Arabia's largest oil processing facility.

"Because of the tension and sensitive situation, our region is like a powder keg," warned Guard Brigadier General Amir Ali Hajizadeh.

"When these contacts come too close, when forces come into contact with one another, it is possible a conflict happens because of a misunderstanding."

Actions on any side could break into the open a twilight war that has been raging just below the surface of the wider Persian Gulf in recent months.

Already, there have been mysterious attacks on oil tankers that the US blames on Tehran, at least one suspected Israeli strike on Shi'ite forces in Iraq, and Iran shooting down a US military surveillance drone.

The attack on 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.

There was no immediate impact on global oil prices from the attacks as markets were closed for the weekend but analysts anticipate a spike in oil prices when markets reopen on Monday.

Saudi Arabia has promised to fill the cut in production with its reserves but has not said how long it will take to repair the damage.

Images from the European Commission's Sentinel-2 satellite showed black char marks at the heart of the Abqaiq plant on Sunday, marks not seen over the previous month.

US Secretary of State Mike Pompeo directly blamed Iran for the Saudi attack on Twitter without offering evidence to support his claim.

US officials previously alleged at least one recent drone attack on Saudi Arabia came from Iraq, where Iran backs Shi'ite militias.

Those militias in recent weeks have been targeted themselves by mysterious air strikes, with at least one believed to have been carried out by Israel.

Iranian foreign ministry spokesman Abbas Mousavi dismissed Pompeo's remarks as "blind and futile comments".

He said: "The Americans adopted the 'maximum pressure' policy against Iran, which, due to its failure, is leaning toward 'maximum lies'."

Separately, Iraqi Prime Minister Adel Abdul-Mahdi's office issued a statement on Sunday denying the drone attack came from there.

Oil-rich Kuwait also said it would increase security around the country's "vital sites" over the attacks.

Houthi leader Muhammad al-Bukhaiti reiterated his group's claim of responsibility, saying it had exploited "vulnerabilities" in Saudi air defences to strike the targets.

Iran, meanwhile, kept up its own threats.

Hajizadeh, who leads the country's aerospace program, gave an interview published across Iranian media on Sunday that discussed Iran's downing of a US drone in July.

He said Guard forces were ready for a counterattack if America responded, naming the Al-Udeid Air Base in Qatar and Al-Dhafra Air Base near Abu Dhabi in the United Arab Emirates as immediate targets, as well as US Navy ships in the Persian Gulf and the Arabian Sea.

It was not just Iran making threats as US Senator Lindsey Graham, a South Carolina Republican close to President Donald Trump, suggested retaliatory strikes targeting Iran.

"Iran will not stop their misbehaviour until the consequences become more real, like attacking their refineries, which will break the regime's back," Graham wrote on Twitter.