US Approves, Then Cancels, Iran Strikes After Drone Shot Down, Says Report

Washington, Jun 21 (AFP) Donald Trump approved but then scrapped strikes against Iranian targets on Thursday, The New York Times reported, after Iran shot down a US drone in what the president termed a "big mistake." The US was planning to hit "a handful of Iranian targets, like radar and missile batteries" Thursday evening, the newspaper said, citing senior administration officials, but the plan was suddenly aborted in its early stages.

White House and Pentagon officials declined to comment, the Times said, and it was unclear whether there were plans for such strikes to go forward in the future.

Iran said earlier it had recovered parts of a US Global Hawk spy drone in its territorial waters after downing the aircraft in a missile strike, but the Pentagon says it was above international waters when it was hit.

"Iran made a very big mistake!" Trump tweeted, before later appearing to dial back tensions.

"I find it hard to believe it was intentional, if you want to know the truth," Trump said. "I think that it could have been somebody who was loose and stupid that did it." The president's mixed message left the world unsure what Washington's next move would be.

"We don't seek war, but will zealously defend our skies, land & waters," said Iranian Foreign Minister Mohammad Javad Zarif.

Iran Gives Coordinates of US Drone

In Tehran, Zarif said Thursday a US surveillance drone "violated Iranian airspace" before being shot down earlier in the day, providing coordinates to back his claim.

 The drone "was targeted at 04:05 at the coordinates (25?59'43"N 57?02'25"E) near Kouh-e Mobarak. We've retrieved sections of the US military drone in OUR territorial waters where it was shot down."

Zarif earlier tweeted that Iran would go to the United Nations to prove that the drone had entered its airspace and that "the US is lying".

With tensions soaring between the two countries following a series of attacks against tankers in the Gulf, the Pentagon confirmed a US surveillance drone had been shot down by Iranian forces early Thursday.

But it insisted the unmanned aircraft was in international airspace.

The Pentagon released a graphic pinpointing the position of the drone on a map of the Strait of Hormuz, the strategic passage through which some 35 percent of the world's seaborne oil passes.

Oil Jumps 6% on Trump Threat

World oil prices spiked more than 6% on Thursday on President Trump warning Iran made "a very big mistake" after it boasted of downing a US spy drone.

The developments accelerated day-on-day gains in US oil benchmark WTI in late New York morning trading, AFP reported from London.

Europe's Brent Crude rose by nearly 5% at one point, before both contracts pulled back somewhat.

Iran shot down the drone near the Strait of Hormuz, a major choke point for world crude shipments, spurring market fears of a confrontation that could badly constrain supplies.

Further solid support for oil prices, as for global stock markets, also came from the US Federal Reserve signalling it could soon cut interest rates, while the dollar and US Treasury yields fell.

"This (US-Iran tension) will only stoke tensions in the region and produce short-term support for oil prices," said analyst Neil Wilson at trading site Markets.com.

Crude had ended slightly down Wednesday despite a drop in US inventories -- indicating a pick-up in demand -- and news that OPEC and other producers led by Russia had agreed a date to discuss further caps.

The drone incident comes amid worsening tensions between Iran and the United States.

"We know that geopolitical tensions in the region are worsening and raise supply-side concerns in terms of short-term outages," said analyst Wilson.

"But with OPEC already curbing output and US production at a record high, we still think the market is far less susceptible to a shock than in years gone by." Traders were also jolted Thursday by news that a Yemeni rebel strike targeted a desalination plant in southwest Saudi Arabia.