Gulf in crisis as accusations fly over oil attacks
Iran rejects US 'lies' as fuel prices expected to spike
A weekend drone attack on Saudi Arabia that cut into global energy supplies and halved the kingdom's oil production is threatening to fuel a crisis in the region.
Iran has denied US allegations it launched the assault as tensions remained high over Tehran's collapsing nuclear deal.
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.
The attack on Saudi Arabia's largest oil processing facility has been claimed by Yemen's Iran-backed Houthi rebels.
"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.
There was no immediate impact on global oil prices because markets were closed for the weekend.
But analysts anticipate a spike in oil prices when markets reopen today.
Saudi Arabia has promised to fill in 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 yesterday, marks not seen over the previous month.
US Secretary of State Mike Pompeo directly blamed Iran for the Saudi attack, without offering evidence.
"Amid all the calls for de-escalation, Iran has now launched an unprecedented attack on the world's energy supply," Mr Pompeo said.
"There is no evidence the attacks came from Yemen."
UN experts claim Iran supplies the Houthis with weapons and drones - a charge Tehran denies.
US officials claim 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 Mr Pompeo's remarks as "blind and futile comments".
"The Americans adopted the 'maximum pressure' policy against Iran, which, due to its failure, is leaning toward 'maximum lies'," he said.