Saudi Arabia seeks oil supply protection as US and Iran face off

Saudi Energy Minister Khalid al-Falih said there must be "a rapid and decisive response to the threat" to energy supplies, market stability and consumer confidence. PHOTO: REUTERS

DUBAI (REUTERS) - Saudi Arabia called for swift action to secure Gulf energy supplies and joined the United States in blaming Iran for attacks on two oil tankers in a vital shipping route that have raised fears of broader confrontation in the region.

Last Thursday's (June 13) tanker attacks in the Gulf of Oman exacerbated the antagonistic fallout from similar blasts in May that crippled four vessels. Washington, already embroiled in a stand-off with Iran over its nuclear programme, has blamed Teheran. Saudi Arabia's crown prince also accused Iran on Saturday.

Iran has denied any role in the strikes on the tankers south of the Strait of Hormuz, a major transit route for oil from Saudi Arabia, the world's biggest crude exporter, and other Gulf producers.

Saudi Energy Minister Khalid al-Falih said there must be "a rapid and decisive response to the threat" to energy supplies, market stability and consumer confidence, his ministry said on Twitter.

Saudi Crown Prince Mohammed bin Salman, in an interview with Saudi-owned newspaper Asharq Al-Awsat, blamed Iran and called on the international community to take a "decisive stand" against the attacks.

"The kingdom does not want a war in the region but it will not hesitate to deal with any threats to its people, its sovereignty, or its vital interests," the Crown Prince said.

The US military released a video last Thursday that it said showed Iran's Revolutionary Guards were behind the explosions that damaged the Norwegian-owned Front Altair and the Japanese-owned Kokuka Courageous.

"Iran did do it and you know they did it because you saw the boat," US President Donald Trump told Fox News last Friday.

The US has tightened sanctions on Iran since Washington withdrew from a 2015 nuclear pact between Teheran and global powers last year. Washington's stated aim is to drive Iranian oil exports, the mainstay of its economy, to zero.

Teheran has said that if its oil exports were halted, it could block the Strait of Hormuz, a narrow channel of water separating Iran and Oman, through which passes a fifth of the oil consumed globally.

Oil prices have climbed 3.4 per cent since last Thursday's attacks. Ship insurers said insurance costs for ships sailing through the Middle East have jumped by at least 10 per cent.

Saudi Arabia's energy minister said in Japan at a meeting of energy ministers from the Group of 20 nations that the kingdom is committed to ensuring stability of global oil markets.

Japanese Industry Minister Hiroshige Seko said ministers agreed on the need to "work together to deal with the recent incidents from (an) energy security point of view".

Mr Trump, who pulled the US out of the nuclear deal under which world powers agreed to ease international sanctions on Iran in return for curbs on Teheran's nuclear work, said any move to close the Strait of Hormuz would not last long.

He also said he was open to holding talks with Iran, although Teheran said it had no plans to negotiate with the US unless it reversed a decision on the nuclear deal.

Teheran and Washington have both said they have no interest in a war. But this has done little to assuage concerns that the arch foes could stumble into conflict.

A US official told Reuters that a surface-to-air missile was fired from Iranian territory last Thursday morning at a US drone that was near Front Altair following the attack on the tanker.

The missile did not hit the drone, the official said.

Acting US Defence Secretary Patrick Shanahan said the US was "planning various contingencies" when asked if more military forces would be sent to the area, but added that the focus was on building an international consensus.

"We also need to broaden our support for this international situation," he told reporters last Friday.

As well as blaming Iran for the tanker attacks, Washington has said Teheran was behind May 14 drone strikes on two Saudi oil-pumping stations. Teheran has denied all those charges.

Britain has backed the US in blaming Iran for the tanker attacks. On Saturday, Iran summoned the British ambassador to complain about its "unacceptable stance", ISNA news agency reported.

Other nations have urged caution. Germany said the video released by the US military was not enough to prove Iran's role, while UN Secretary-General Antonio Guterres called for an independent investigation to determine responsibility.

China and the European Union called for restraint.

Iranian President Hassan Rouhani renewed Iran's threat to continue scaling back compliance with the nuclear deal unless other signatories to the pact show "positive signals".

He did not specify what Iran wanted in his comments to a meeting of Asian leaders in Tajikistan.

France and other European signatories to the nuclear deal have said they wanted to save the accord. But many of their companies have cancelled deals with Teheran, under pressure from the US.

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