The attacks on vital Saudi Arabian oil installations have thrust western powers into a dilemma: whether and how to retaliate against Iran, which Washington alleges is the mastermind behind the offensive.

The US and European countries have to balance any desire to punish Tehran against the risk that a tough response would trigger a wider conflict in the Gulf, push oil prices up and hurt the global economy.

In a sign of the high stakes, EU powers held back on Monday from attributing responsibility for the attack — a cautious stance also influenced by their desire to salvage a landmark nuclear deal with Iran that Washington left last year. But the drone offensive, for which Iran-backed Houthi militias in Yemen have claimed credit, is making it even tougher for President Emmanuel Macron’s efforts to coax US president Donald Trump to the negotiating table with Tehran. 

“Obviously these escalation points make life much harder and they squeeze the political space for such diplomatic initiatives,” said Ellie Geranmayeh, a Middle East specialist at the European Council on Foreign Relations think-tank. “But unless there is some sort of off-ramp being created, Trump is going to face a lot more of these types of events in the run-up to his re-election campaign — and soaring oil prices are not going to be a good thing for him.”

While Mike Pompeo, US secretary of state, has accused Iran of launching an “unprecedented attack” on two state oil facilities in Khurais and Abqaiq, Mr Trump took a more measured position on Monday. Iran has denied any role in the incident. 

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“They say that they had nothing to do with the attack on Saudi Arabia. We’ll see?” Mr Trump wrote on Twitter, straight after accusing Tehran of engaging in a “big lie” when it denied shooting down a US drone over the summer.

US officials have refused to speak about any possible response. Mark Dubowitz, an Iran hawk who heads the Foundation for Defense of Democracies think-tank, said the Trump administration was awaiting a “final confirmation” about the attacker.

“One never knows, but the rhetoric President Trump is using is signalling in the direction of a kinetic response,” said Mr Dubowitz. “It would have to be more meaningful to the US response to the Iranian attack on the drone.”

Mike Rogers, a former Republican chairman of the House intelligence committee, said there was “going to have to be a price paid” once the culprit was confirmed. He said the US should look at all options, including identifying realistic targets in Iran and diplomacy. But he noted that Mr Trump had previously shied away from using force.

Analysts echo the idea that the US president has a history of employing bellicose rhetoric but eventually adopting a softer stance.

“The president is more combative on Twitter than he is to initiating military action,” said Suzanne Maloney, an Iran expert at the Brookings Institution. “He has an excellent political radar and he recognises that there is no appetite among Americans for another costly protracted military intervention in the Middle East.”

Col Turki al-Maliki, a spokesman for the Saudi-led coalition involved in Yemen’s civil war, said preliminary results showed the weapons to be Iranian.

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Riyadh, which has long accused Tehran of smuggling weapons to the Houthis, has not yet directly blamed the Islamic republic for the attacks.

“We are currently working to determine the location . . . The terrorist attack did not originate from Yemen as the Houthi militia claimed,” Col Maliki told reporters in Riyadh.

The attack came days after the firing of John Bolton, the national security adviser who had publicly advocated for regime change in Iran before joining the White House. It also came as Mr Trump pushed to meet Iranian president Hassan Rouhani at the UN General Assembly next week.

European powers for their part have stopped short of either accusing Iran or urging an immediate aggressive response.

Steffen Seibert, spokesman for Angela Merkel, the German chancellor, said the government “does not have its own assessment” as to who was behind the assaults. 

Dominic Raab, the UK foreign secretary, told Sky News that Britain was “outraged” by a “despicable” assault that “was a wanton violation of international law”. But he added: “In terms of who is responsible, the picture is not entirely clear.”

Paris, which has spearheaded diplomatic manoeuvring between Tehran and Washington, issued a terse two sentence statement at the weekend warning that such attacks needed to stop because they could “only exacerbate the tensions and risks of conflict in the region”.

Russia — which, along with China, the UK, France and Germany, is a signatory of the Iran nuclear deal — went a step further and issued a stern warning against military action.

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European diplomats share many US concerns about Iranian behaviour, including over its ballistic missile programme, its alleged responsibility for assassination plots in Europe, and its support for armed groups in countries such as in Yemen, Syria and Lebanon. But they are nervous about being hitched to any military action proposed by Mr Trump, whom they see as impulsive and unpredictable. 

A military escalation would scupper any attempts to rescue the Iran nuclear deal by maintaining trade with Tehran, despite US “maximum pressure” sanctions that are hurting the economy. Mr Macron has gone a step further in proposing a package of Washington-Tehran talks and financial relief for Iran.

That goal looks more distant now. The latest in a growing number of dangerous flare-ups in the Gulf has further narrowed the path to a peaceful solution to the Iran crisis.

“This puts the Europeans in a tough spot,” said Axel Hellman of European Leadership Network think-tank. “It puts additional pressure on them to address Iran’s actions, in order to reduce tensions and forge a diplomatic route forwards.

Additional reporting by Guy Chazan in Berlin, Henry Foy in Moscow and Andrew England in Riyadh

Via Financial Times