Iraq denied on Sunday that its territory was used to launch attacks against Saudi oil installations.
A statement from Prime Minister Adel Abdul Mahdi’s office said Baghdad would "decisively" if anyone tried to use its territory to attack other countries.
It said the government was closely monitoring developments, expressing its concern over the escalation.
It noted that military solutions complicate humanitarian and political situations and threaten regional security.
US Secretary of State Mike Pompeo on Saturday accused Iran of launching attacks on Saudi oil plants, ruling out the involvement of the Tehran-aligned Houthi militias in Yemen.
The Houthis claimed credit for the attacks on the Abqaiq plant -- Aramco's largest oil processing facility -- and nearby Khurais.
Pompeo dismissed the claim and firmly placed blame on Iran.
“Tehran is behind nearly 100 attacks on Saudi Arabia while Rouhani and Zarif pretend to engage in diplomacy,” Pompeo said, referring to Iran’s President Hassan Rouhani and Foreign Minister Mohammed Javad Zarif.
“Amid all the calls for de-escalation, Iran has now launched an unprecedented attack on the world’s energy supply,” he added.