Iran’s supreme leader has announced “there will be no talks with the US at any level” in remarks which appeared to end all speculation about a possible meeting between the two countries’ presidents at the UN later this month.

Iranian state TV quoted Ayatollah Ali Khamenei as saying this is the position of the entire leadership of the country, and that “all officials in the Islamic Republic unanimously believe” this.

There had been reports about a possible meeting between US president Donald Trump and his Iranian counterpart Hassan Rouhani during the upcoming UN General Assembly in New York.

(PA Graphics)
(PA Graphics)

However, tensions roiling the Persian Gulf have escalated following an attack on major oil sites in Saudi Arabia at the weekend which the US alleged Iran was responsible for – a claim Tehran denies.

The attack set ablaze a crucial Saudi oil processing plant and a key oil field. It was claimed by Iranian-allied Houthi rebels, who are at war with a Saudi-led coalition which is trying to restore Yemen’s internationally-recognised government to power.

Mr Trump declared on Monday that it “looks” like Iran was behind the attack.

But he stressed that military retaliation was not yet on the table in response to the strike against a key ally for the US in the Middle East.

Oil prices soared worldwide amid the damage in Saudi Arabia and fresh fears over war in the region.

But Mr Trump put the brakes on any talk of quick military action after earlier saying the US was “locked and loaded”. He said the oil impact would not be significant on the US, which is a net energy exporter.

The Saudi government called the attack an “unprecedented act of aggression and sabotage” but stopped short of directly pinning blame on Iran.

One US official said the US was considering dispatching additional military resources to the Gulf but that no decisions had been made.

Iran Persian Gulf Tensions
Ayatollah Ali Khamenei said there will be no talks with the US at any level (Office of the Iranian Supreme Leader/AP)

The US already has the USS Abraham Lincoln aircraft carrier battle group in the area, as well as fighter jets, bombers, reconnaissance aircraft and air defences.

Mr Trump said the US could respond “with an attack many, many times larger”, but also said: “I’m not looking at (military) options right now.”

American officials released satellite images of the damage at the heart of the kingdom’s Abqaiq processing plant and a key oil field. US officials said the attackers used multiple cruise missiles and drone aircraft.

Persian Gulf Tensions
This satellite image of Saudi Aramco’s Abqaiq oil processing facility in Buqyaq shows scorching at the site (European Commission/AP)

Independent experts said the satellite images show the attackers had detailed knowledge of which tanks and machinery to hit within the sprawling Saudi oil processing facility at Abqaiq to cripple production.

However, “satellite imagery can’t show you where the attack originated from,” said Joe Bermudez, from the Centre for Strategic and International Studies.

The US alleges the pattern of destruction suggested Saturday’s attack did not come from neighbouring Yemen, as claimed by Iranian-backed Houthi rebels there. A Saudi military source alleged “Iranian weapons” had been used.

The Saudis have invited the UN and other international experts to help investigate, suggesting there is no rush to retaliate.