US blames Iran for 'disrupting flow of oil': Update 2

Adds details throughout

Iran is responsible for the apparent attacks today and last month on tankers in the Mideast Gulf, US secretary of state Mike Pompeo said today.

"It is the assessment of the US government that Iran is responsible for the attacks that occurred in the Gulf of Oman today," Pompeo said. He did not offer specific proof but cited intelligence collection, "the weapons used, the level of expertise needed to execute the operation, recent similar Iranian attacks on shipping, and the fact that no proxy group operating in the area has the resources and proficiency to act with such a high degree of sophistication."

Tehran in April vowed to disrupt the flow of oil through the strait of Hormuz "and is now working to execute on that promise," he said. "Iran is lashing out because the regime wants our successful maximum pressure campaign lifted."

Pompeo also blamed Iran for the incident in May during which a very large crude carrier, an Aframax, a Handymax and a bunkering vessel were damaged off the coast of UAE, for drone attacks on Saudi Aramco's oil pumping stations in Saudi Arabia, and the missile attacks on Saudi airports and infrastructure that Yemen's Houthi rebels have claimed responsibility for. An official inquiry submitted by the UAE to the UN Security Council on the May tanker attacks blamed an unnamed "state actor."

Today's attacks targeted Long Range 2 (LR2) Front Altair, carrying a naphtha cargo from the UAE to Taiwan, and chemical tanker Kokuka Courageous. The two vessels had recently moved through the strait of Hormuz, a major shipping and trading lane in the Middle East. About 20mn b/d of crude and oil products transits the strait.

Nymex July light, sweet crude futures increased by $1.14/bl to settle at $52.28/bl.

Saudi oil minister Khalid al-Falih condemned the "terrorist attacks" without attributing them to any party. "The Ministry of Energy and Saudi Aramco have raised the level of readiness to deal with such aggressive terrorist acts, reaffirming Saudi Arabia's commitment to the reliable supply of oil to global markets," al-Falih said.

The Pentagon since May has increased its naval presence in the Middle East and announced a deployment of an additional 1,500 personnel to confront what US officials described as threats from Iran to Mideast Gulf oil shipping and infrastructure.

Prior to today's incidents, defense officials had suggested that the increase in US military personnel in the region had diminished the threats.

Iran has denied responsibility for the incidents. "Suspicious does not begin to describe what likely transpired," Iran's foreign minister Mohammad Javad Zarif said via Twitter of today's apparent attacks, noting that they took place during a visit to Tehran by Japanese prime minister Shinzo Abe.

Pompeo said Tehran "insulted Japan by attacking a Japanese oil tanker just outside of Iranian waters" while Abe was in Iran. The Kokuka Courageous, a Panamanian-flagged vessel, was carrying methanol loaded in Jubail, Saudi Arabia, according to al-Falih. It was listed as heading to Singapore, according to vessel tracking company Vortexa.

Abe has directed the relevant authorities in Japan to collaborate with their foreign counterparts in gathering information on the incident and to ensure the safety of the crew of the Kokuka Courageous.

Abe visited Iran to try to help defuse tensions between Washington and Tehran and propose negotiations between the leaders of those countries. But Iran's leaders rejected the suggestion, saying that they did not believe that President Donald Trump's offer to negotiate was in good faith.

"We do not believe at all that the US is seeking genuine negotiations with Iran; because genuine negotiations would never come from a person like Trump," Iran's supreme leader Ayatollah Ali Khamenei said via Twitter.

Trump responded via Twitter as well. "While I very much appreciate P.M. Abe going to Iran to meet with Ayatollah Ali Khamenei, I personally feel that it is too soon to even think about making a deal. They are not ready, and neither are we!"

Pompeo did not announce new US actions in response to today's incidents, beyond planning to raise the issue at the UN Security Council.

"No economic sanctions entitle Iran to attack innocent civilians, disrupt global oil markets, and engage in nuclear blackmail," he said. He again touted the prospect of US-Iranian talks "at the right time" and said that "Iran should meet diplomacy with diplomacy."

The US does not seek conflict but will defend its forces and interests around the world, acting defense secretary Patrick Shanahan said. "As secretary Pompeo said earlier today, the focus of the US government is on diplomacy to drive a comprehensive agreement that fosters peace and security."