By Summer Said and Dion Nissenbaum 

Saudi Arabia's air defense forces last week shot down missiles aimed at Saudi Aramco oil facilities, kingdom officials said Wednesday, after Iran-aligned Houthis in Yemen said they had targeted the world's most valuable company and other sites in Saudi Arabia.

The missile attacks came four months after a squad of drones carried out coordinated attacks on two of Saudi Arabia's vital crude production sites and temporarily knocked out more than half of the country's oil production capacity.

Yemeni rebels claimed responsibility for the attacks. Saudi Arabia and the U.S. blamed Iran, which backs the Houthi rebels, for the attacks. Iran has denied involvement.

Since the attacks last fall, the Saudi Arabian Oil Co., known as Aramco, staged the world's biggest initial public offering in December. The stock offering, on Saudi Arabia's Tadawul exchange, attracted much less European and U.S. investor interest than the company anticipated, in part due to concerns over Aramco's high valuation and the security of its facilities in the volatile Middle East.

The most recent attacks threaten to upset attempts at peace between the Saudis, the Houthis and Iran. Saudi Arabia has been trying to dislodge the Houthi forces from neighboring Yemen since 2015. In recent months, Riyadh has engaged in secret talks with the Houthis, according to Saudi, Persian Gulf and U.S. officials.

Saudi officials with the matter said all strikes on Saudi Arabia last week were foiled. Aramco declined to comment.

On Tuesday, U.S. Secretary of State Mike Pompeo said the U.S. was alarmed by the spike in violence and called on the Houthis to halt any attacks on Saudi territory.

"Over the past few weeks de-escalatory efforts produced a significant reduction in fighting and showed to the Yemeni people that an end to hostilities is possible," he said. "However, renewed fighting is unacceptable and threatens to undermine this hard-earned progress."

The new escalatory cycle accelerated earlier this month when Houthi fighters launched a missile attack that killed more than 100 Yemeni government fighters in Marib. The Saudi military responded with expanded airstrikes aimed at Houthi forces in Yemen.

Martin Griffiths, the United Nations' special envoy to Yemen, has warned that the renewed violence could undermine peace talks.

Houthi forces initiated the push for talks in September with a proposal for a unilateral cease-fire. The Saudis responded with a partial cease-fire of their own.

"A Houthi faction is angry about the conversations with the Saudis," said a former security official in the Trump administration. "They are trying hard to ruin the back channels and hope the Saudis will overreact."

Saudi Arabia also is trying to mend fences with Iran and other regional foes as officials in the kingdom have grown more worried about the risks conflict poses to its oil-dependent economy.

As part of the attacks last week, Yemeni rebels targeted Aramco's Abha and Jazan facilities as well as airports, the Khamis Mushait military base and other targets inside Saudi Arabia, Houthi spokesman Yahya Saree said on television.

The attacks were a response to airstrikes on Yemen, he said.

Aramco's facility in Jazan is home to a 400,000-barrel-a-day refinery. The location doesn't house crude-oil production operations or major export terminals. The complex, still under construction, is expected to be fully operational in the second half of 2020, according to Aramco's IPO prospectus.

--Benoit Faucon contributed to this article.

(END) Dow Jones Newswires

January 29, 2020 13:13 ET (18:13 GMT)

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