Iran on Sunday warned the US against retaliatory strikes following Saturday’s drone attacks on Saudi Arabia’s oil infrastructure.
“Everybody should know that all American bases and their aircraft carriers in a distance of up to 2,000 kilometers around Iran are within the range of our missiles”, IRGC commander Amirali Hajizadeh said, according to Tasnim. He also suggested Tehran is prepared for “full-fledged war”.
On Saturday, Lindsey Graham called for US strikes on Iran’s oil refineries.
Iranian foreign ministry spokesman Abbas Mousavi called Mike Pompeo’s allegations against Tehran “pointless” on Sunday. “Such allegations and blind and fruitless remarks are meaningless and not understood in diplomatic framework”, he said, adding that “the Americans have opted for a policy named ‘maximum pressure’ against Iran, but it has apparently tilted towards maximum lies for their failures”.
Mousavi also “noted that such hostile remarks by the US officials sound like the plots of the intelligence agencies and secret services to distort the face of a country in a bid to lay the groundwork for future moves”, Fars wrote, recapping, in language befitting of a state propaganda machine.
Javad Zarif, whose surprise cameo at the G-7 last month was the talk of Biarritz, mocked Pompeo in a tweet. “Having failed at ‘max pressure’, Mike Pompeo is turning to ‘max deceit'”, Zarif said, before suggesting that yet again, America has failed to understand the nature of asymmetric warfare. “The US [and] its clients are stuck in Yemen because of the illusion that weapon superiority will lead to military victory”, he chided. “Blaming Iran won’t end [that] disaster [but] accepting our April ’15 proposal to end the war and begin talks may”.
Meanwhile, Iraq has rejected the idea that the drone attacks originated on its soil. “Iraq is constitutionally committed to preventing any use of its soil to attack its neighbors”, Prime Minister Adel Abdel Mahdi said in a statement. “The Iraqi government will be extremely firm with whomever tries to violate the constitution”.
Obviously, that’s laughable. Iran’s clout in Iraq is a continual source of consternation for Washington and it is entirely possible that Quds-allied militias in the country launched the attacks on Saturday. In the same series of tweets that found Trump’s top diplomat lashing out at Zarif, Pompeo said the US has “no evidence” to support the contention that the drones came from Yemen.
Irrespective of the details, Iran was, of course, behind the attacks. Whether they originated in Yemen or Iraq is relevant in terms of where things go from here, but the only way Tehran isn’t ultimately responsible is if you want to float a false flag theory, which seems wildly implausible in this case. (One imagines nobody would be on board with blowing up Abqaiq just to give the US an excuse to bomb Iran, especially not at a time when Trump just fired John Bolton in the interest of paving the way for prospective talks with Hassan Rouhani.)
Europe is alarmed. “Yesterday’s attack… poses a real threat to regional security”, a spokeswoman for EU foreign policy chief Federica Mogherini said in a statement. “At a time when tensions in the region are running high, this attack undermines ongoing work at de-escalation and dialogue”.
As far as crude prices go, there’s speculation about a spike to $100 in the event it takes longer than expected for Aramco to bring lost production back online. Sources on Sunday said it may take weeks to fully restore capacity.
The following excerpts are from Reuters’ summary of initial analyst takes (these are truncated – the full article from Reuters is available here):
BOB MCNALLY OF RAPIDAN ENERGY
Crude prices LCOc1 would spike by at least $15-20 per barrel in a seven-day disruption scenario and go well into triple digits in a 30-day scenario.
“This does not include what are likely to be large (if difficult to model or predict) premia to reflect zeroing out of global spare production capacity amidst ongoing disruption risks, hoarding, and panic sentiment.”
GREG NEWMAN, CO-CEO OF ONYX COMMODITIES
Expects Brent futures to open $2 per barrel up and close $7 to $10 per barrel higher on Monday. The market could see a return to $100 per barrel if the issue cannot be resolved in the short term.
CHRISTYAN MALEK, JP MORGAN
“I’d expect a $3-$5 move in oil prices in the short term. The market has been sleep-walking in risk premium in the region, disproportionately focusing on risk to demand growth and shale oil supply.”
“This attack introduces a new, irreversible risk premium into the market.”
Expects oil to rise to $80-90 a barrel over the next three-six months as the market turns its focus to geopolitics.