US: SAUDI OIL ATTACKS CAME FROM SOUTHWEST IRAN

By Phil Stewart and Parisa Hafezi, WASHINGTON/DUBAI

The United States believes the attacks that crippled Saudi Arabian oil facilities last weekend originated in southwestern Iran, a US official said on Tuesday, an assessment that further increases tension in the Middle East.

Three officials, speaking to Reuters on condition of anonymity, said the attacks involved both cruise missiles and drones, indicating that they involved a higher degree of complexity and sophistication than initially thought.

The officials did not provide evidence or explain what U.S. intelligence they were using for the evaluations. Such intelligence, if shared publicly, could further pressure Washington, Riyadh and others to respond, perhaps even militarily.

Saudi state television said the Saudi Defense Ministry will hold a media conference on Wednesday that will show evidence of Iran's involvement in the Aramco attacks, including the use of Iranian weapons.

Iran denies involvement in the strikes. Iran's allies in Yemen's civil war, the Houthi movement, claimed responsibility for the attacks. The Houthis say they struck the plants with drones, some of which were powered by jet engines.

US President Donald Trump on Monday said it looked as if Iran - which has a long history of friction with neighbor Saudi Arabia - was behind the attacks.

But in a sign that US allies remain unconvinced, French Foreign Minister Jean-Yves Le Drian said he was unsure if anyone had any evidence to say whether drones "came from one place or another."

Saudi Arabia sought to reassure markets after the attack on Saturday halved oil output, saying on Tuesday that full production would be restored by month's end.

Iranian Supreme Leader Ayatollah Ali Khamenei on Tuesday ruled out talks with the United States unless the Trump administration returns to the nuclear accord between Iran and the West that the United States abandoned last year.

"Iranian officials, at any level, will never talk to American officials ... this is part of their policy to put pressure on Iran," Iranian state TV quoted him as saying.

Trump on Tuesday said he is not looking to meet Iranian President Hassan Rouhani during a UN event in New York this month.

US-Iran relations deteriorated after Trump quit the nuclear pact and reimposed sanctions over Tehran's nuclear and ballistic programs, severely hurting the Iranian economy. Trump also wants Iran to stop supporting regional proxies, including Yemen's Houthis.

Iran's clerical rulers openly support the Houthis, who are fighting a Saudi-led coalition in Yemen, but Tehran denies that it actively supports the Yemeni group with military and financial support.

Despite years of air strikes against them, the Houthi militia boasts drones and missiles able to reach deep into Saudi Arabia, the result of an armament campaign pursued and expanded energetically since Yemen's war began four years ago.

Another senior Trump administration official said the Houthi claim to have used 10 drones in the attacks was undercut by the fact that Abqaiq was struck at least 17 times. The second location, he added, was hit at least twice by precision-guided munitions.

"The Houthi claim does not stand up to scrutiny," said the US official, who spoke to reporters on condition of anonymity and said the Houthis had never used the type of unmanned aerial vehicle (UAV), or drone, that was employed in the attacks.

Strains between Washington and Tehran have risen more in recent months after attacks on tankers in the Gulf that the United States blames on Tehran, and Iran's downing of a US military drone that prompted preparations for a retaliatory air strike that Trump says he called off at the last minute.

Saudi Arabia has asked international experts to join its investigation, which indicates the attacks did not come from Yemen, the Saudi foreign ministry said.

One of the three US officials expressed confidence that Saudi Arabia's collection of materials following the attacks would yield "compelling forensic evidence ... that will point to where this attack came from."

A US team is helping Saudi Arabia evaluate evidence from the attacks, which hit crucial facilities of Saudi state-owned oil company Aramco in Abqaiq and Khurais and initially cut Saudi oil production in half.

The Saudi energy minister said on Tuesday that the kingdom will achieve 11 million barrels per day (bpd) capacity by the end of September.

Minister Prince Abdulaziz bin Salman also told a news conference that the world's top oil exporter would keep full oil supplies to customers this month.

He said Saudi Arabia would keep its role as the secure supplier of global oil markets, adding that the kingdom needed to take strict measures to prevent further attacks, which exposed the vulnerability of Saudi Arabia's oil industry and the broader global economy.

Oil prices fell 5% after the news that Saudi production is back, having surged more than 20% at one point on Monday - the biggest intra-day jump since the 1990-91 Gulf crisis over Iraq’s invasion of Kuwait.

A day after warning the United States was "locked and loaded" to respond to the Saudi incident, Trump dialed down his rhetoric, saying on Monday there was "no rush" to retaliate and Washington was coordinating with Gulf Arab and European states.

"I'm not looking at options right now. We want to find definitively who did this," Trump said.

Secretary of State Mike Pompeo was traveling to Saudi Arabia on Tuesday.

German Chancellor Angela Merkel said the Iran nuclear pact, which European parties are trying to salvage, is one building block "we need to get back to".

Saudi Arabia, which has supported tougher US sanctions on Iran, said an initial investigation showed the strikes were carried out with Iranian weapons.

Galip Dalay, a non-resident fellow at the Brookings Doha Center think tank, said the sophistication of the attacks and the fact such an operation would require high-level approval pointed at Tehran.

"Iran is essentially saying, 'If I can't get my oil into international markets, then no one should be able to do it'," he said. "They are basically looking to destabilize an international market that they have been cut out of by US sanctions."