Saudi Arabia's energy minister has said that more than half of the country's daily crude oil production that was knocked out by an attack had been recovered and that production capacity at its targeted plants would be fully restored by the end of the month.

Aramco says half of daily production recovered 

"Where would you find a company in this whole world that went through such a devastating attack and came out like a phoenix?" Prince Abdulaziz bin Salman said on Tuesday about the state-owned Saudi Aramco, which was the target of the attacks. His question to reporters, many of them Saudi, drew applause. The state-run company's ability to quickly recover from an attack of this magnitude on its most important processing facility highlights not only its resilience but its importance as the kingdom's crown jewel.

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Drone attack on Aramco

The attack early Saturday struck a Saudi oil field and the world's largest crude oil processing plant in the kingdom's eastern region, taking out 5.7 million barrels of crude oil production per day for the kingdom, or about 5 percent of the world's daily production. Prince Abdulaziz said Aramco will honour its commitments to its customers this month by drawing from its reserves of crude oil and offering additional crude production from other oil fields. He said production capacity would reach up to 11 million barrels a day by the end of September and 12 million barrels in November. He said production at the Abqaiq processing facility is currently at 2 million barrels per day.

His briefing to reporters was highly anticipated around the world, with oil prices spiking more than 14 percent on Monday on the first day of trading after the attacks on Saudi Arabia. It was the biggest single-day jump in years due to the damaging attack. Following reports of how quickly the kingdom could restore production, oil prices fell on Tuesday. Brent, the international benchmark, was down 6 percent to USD 64.89 a barrel. US oil was down 5.4 percent to USD 59.50. The attack also took out 2 billion cubic feet of daily gas production.

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Consequences of Attack

Aramco, the Saudi oil company targeted, said no workers were wounded in the attack. Iranian-allied Houthi rebels in Yemen, which Saudi Arabia are at war with, claimed responsibility, saying drones were launched in the attack. The war in Yemen, the Arab region's poorest country, has sparked the world's worst humanitarian crisis and killed tens of thousands of people, with many of those deaths blamed on Saudi coalition warplanes. Saudi Arabia, however, has claimed the attack did not come from Yemen and said initial investigations show Iranian weapons were used. The kingdom, though, has not yet said where the attack was launched from or what kind of weapons were involved.

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US blames Iran

The US has made similar allegations, going so far as to say the attack may have been launched from Iran itself or nearby Iraq, where Iran has powerful proxy militias on the ground. Iran has denied the charges. Trump declared Monday it "looks" like Iran was behind the explosive attack on the Saudi oil facilities. But he stressed that military retaliation was not yet on the table in response to the strike against a key US Mideast ally. Trump, alternating between aggressive and nonviolent reactions, said the US could respond "with an attack many, many times larger" but also "I'm not looking at options right now." Earlier, he had said the US was "locked and loaded." He also said the impact of oil production shortages would not be significant on the US, which is a net energy exporter.

The American Automobile Association, known as AAA, said Americans can expect local pump prices to start to increase this week by as much 25 cents per gallon throughout September, but that how long the higher price lasts for depended on how quickly Saudi Arabia could restore production. The attack was among the most serious escalations in tensions in the Persian Gulf in recent months. The crisis stems from President Donald Trump's decision to pull the US out of the 2015 nuclear deal between Iran and world powers. He also re-imposed and escalated sanctions on Iran that sent the country's economy into freefall, including targeting its oil exports.

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Iran denies claims

Iran's supreme leader said Tuesday "there will be no talks with the US at any level". His remarks appear to end all speculation about a possible US-Iran meeting between the two countries' presidents at the UN later this month. Iranian state TV quoted Ayatollah Ali Khamenei, who's been personally sanctioned by the Trump administration, as saying the US wants to prove its "maximum pressure policy" against Iran is successful. "In return, we have to prove that the policy is not worth a penny for the Iranian nation," Khamenei said. "That's why all Iranian officials, from the president and the foreign minister to all others have announced that we do not negotiate (with the U.S.) either bilaterally or multilaterally," he said.

There had been reports about a possible meeting between Trump and his Iranian counterpart, Hassan Rouhani, during the upcoming U.N. General Assembly next week in New York. One US official, speaking on condition of anonymity to discuss internal deliberations, said the US was now considering dispatching additional military resources to the Gulf but that no decisions had been made. In recent months, the US has boosted its military presence with an additional aircraft carrier in the area, as well as fighter jets, bombers, reconnaissance aircraft and air defenses