"The Middle East and global oil markets are reeling after Saudi Arabia's oil infrastructure was severely damaged a huge attack this weekend and on Saturday missiles hit an oilfield at a processing plant in the east of the country residents hosted video on social media showing explosions interrupting the Don Call to prayer and huge fires raging iranian-backed rebels in neighbouring Yemen known as the WHO claimed responsibility but it's uncertain they carried out the attack in any case the bombing seems to be the latest salvo simmering proxy battle between Iran and its allies on one side and America alongside Saudi Arabia on the other who the rebels in Yemen who plays this attack have attacked Saudi Arabia many times in the past few years and those tax have been getting bigger but what we saw on Saturday was more serious and unusual than anything before to Sean Joshi is our defense editor. It was eight hundred kilometers into Saudi Arabia so that that very far in from over the Yemeni border if indeed the attack did come from Yemen and and more importantly it struck what was one of the most important components of Saudi Arabia's oil production capability both oilfield and a processing plant and on top of all of that it risks dramatically escalating tensions between Iran which supports the youth rebels and America Saudi Arabia's ally which is currently strangling around economy with sanctions so the scope escalation is now a much greater than it was so America backs Saudi Arabia and has has been working on its policy towards Iran maximum pressure and and what have you how has the trump administration responded to the attacks well. It was over twitter of course Donald Trump hinted at military action. He said America was locked and loaded and Mike Pompeo the secretary of state suggested the strikes didn't come from Yemen. They probably came from Iran particularly around Revolution regards or its proxy forces in Iraq which which are composed of lots of a mostly Shia militia groups some of the reporting that has come out in the past twenty four hours suggests that Iraq might have been the base for the attacks particularly with Iraqi militia groups eager to retaliate for Israeli strikes on their bases there a few weeks ago although the Iraqi prime minister has denied it America also said the strikes were very big they involve both cruise missiles and drones and lots of them which may suggest it could have been a little beyond the abilities of the WHO `this which again would probably point to Iranian culpability. That's correct. Iran's foreign minister has of course denied it he said Mike Pompeo American Secretary of State had failed at maximum Axum imprescia which is the official. US policy on Iran and had moved now to maximum deceit so of course we see we as usual complete denial from Iran and loss of finger pointing from America so with all of that finger pointing going on and all over the potential for escalation. What what do you think happens next well. If it wasn't ron it would be the the latest in a series of provocations that we've seen in the region going back to May when we had alleged attacks on international shipping with mines we had hostage taking of International Tanka spot by Romanian forces and we had the shoot down of an American drone which nearly took us to the brink of airstrikes in late June which were cancelled by trump on hours notice the had been some hopes in recent weeks that we will potentially seeing a little bit of de-escalation. Mike pompeo suggested that Donald Trump might meet his Iranian counterpart Hasaan John Ronnie at the sidelines of the General Assembly that would have been obviously a historic meeting between an American President and an Iranian leader that looks very unlikely now trump has tweeted angrily denying any such thing and this attack of course might represent Iranian hardliners specifically trying to frustrate that sort of diplomacy by Aronie and others so I think diplomacy is now is much less likely it's very hard to conduct any kind of meaningful talks in this in this environment and there's a risk of escalation either by Saudi Arabia whom this is really bad blow all by America and I wouldn't rule out military escalation if we find that more evidence comes is to light showing Iran's hand in this so not notwithstanding the risks of of greater escalation as things stand right now. What does all this mean for Saudi Arabia and for oil production under markets it eats a big blow to Saudi Arabia. The attack cools the suspension of production equivalent to about sixty percent of the kingdom's output which is about six percent of the world's oil production as soon as markets open today in Asia oil prices soared by about twenty percent and reports seemed to suggest the repairs are going to take take weeks which means there's going to be quite a long effect on prices and all of this comes at a time when the the the Saudi state oil giant Aramco was was looking to list to do its initial public offering. How do you think this will reflect on that not terribly well. It is a particularly delicate time for Saudi Arabia who state oil company. Aramco is by far all the world's largest oil company it was preparing to launch a portion of its shares in what was expected to be the largest initial public offering ever as part of VAT. The Chairman of Aramco had just been replaced. The Energy Minister of Saudi Arabia was shunted aside so investors already a little concerned about some of the uncertainty not and security of supply is a big concern to potential investors it lies at the heart of what Saudi Aramco's able to do it make Saudi Arabia not not just a very big oil producer but also a critical player in world oil markets very important geopolitical plan so attacks like this one call into question security is supply and a very bad news for the Saudi leadership and so what are Saudi Arabia's options here well in some ways. Donald Trump has put the ball all into Saudi Arabia's Court with his latest tweet he said the US was waiting to hear from the kingdom as to who they believe was the cause of this attack and under what terms we we would proceed in other words. He's challenging Saudi Arabia to publicly blame her on in the way that America has and essentially to put its cards on the table. If it wants wants to see a robust American reaction now Saudi Arabia usually would fall in line behind America. They are very close allies. There's a very strong relationship. Between the Saudi Saudi Crown Prince Mohammad bin Salman Donald Trump in the face of an attack like this. They have a very complicated calculation. They absolutely want to push America to throw the gauntlet down to to Iran to put Iran leadership in place to deter Iran from attacks like this but I think they're also concerned about the prospect of escalation about the prospect of moral facilities ability being struck missiles falling Saudi cities a bigger war that would have a huge impact on their economy perhaps on their regime and so this is a crunch point for them. I think they have to decide side. How much do they want to proud donald trump onto action and how much they want to proceed cautiously aware of the enormous stakes for the kingdom itself."