Brent Rises 1.3% to $115.36 After Claim of Ras Tanura Refinery Strike

Key Facts

Brent crude futures rose 1.3% to $115.36 a barrel in Asian trading on Wednesday after a Houthi announcement that it had targeted the Ras Tanura refinery revived supply concerns. The Houthis said they hit the refinery with a ballistic missile and started a fire at the complex, but Saudi authorities did not immediately confirm the strike. The Associated Press was unable to verify the claim of a hit and fire, according to its report on the incident. The price move came a day after Saudi Arabia said it had intercepted missiles headed for Riyadh and the Eastern Province. The account of a refinery strike remained separate from the facts Saudi authorities announced about those interceptions.

The Associated Press quoted Saudi authorities as saying air defenses destroyed two ballistic missiles launched toward Riyadh and three more toward the Eastern Province on Tuesday, October 27. The authorities said the missiles were launched by the Iran-backed Houthis in neighboring Yemen. Witnesses heard at least 4 explosions over the capital, the agency reported. Warnings of attacks were issued before the explosions and later lifted, according to its report. These official details describe the missile interceptions that day, but do not establish that Ras Tanura was hit or caught fire.

The Ras Tanura refinery is part of a complex on the Gulf west of the Strait of Hormuz that also includes a shipping terminal. It has refining capacity of 550,000 barrels a day, making any claim of an attack relevant to the sensitivity of a major refining facility and a site with shipping infrastructure. But the available facts do not confirm that the incident disrupted refinery operations or affected supply flows. The refinery was shut down as a precaution for a period during the first months of the Iran war, according to the Associated Press. That places the site in the broader context of security risks, without establishing new damage or a production halt in this incident.

The Associated Press linked an escalation in fighting between Yemen and Saudi Arabia to increased disruption to oil supplies and a higher risk of a wider regional conflict, 8 months after the Iran war began. Against that backdrop, Brent's jump in Asian trading followed renewed supply concerns after the Houthi announcement. The contract gained $1.48, or 1.3%, to $115.36 a barrel at 0140 GMT on Wednesday. The move reflects the market's response to supply concerns raised by the announcement, while a hit on the refinery remained unconfirmed. The price rise alone does not prove that the incident disrupted oil supplies.

Separately, the Saudi Press Agency said on October 24 that the coalition had intercepted and destroyed two ballistic missiles launched toward Taif and Yanbu. That announcement concerned an incident three days earlier and does not establish that missiles aimed at Taif were intercepted at the same time as the claim of a Ras Tanura strike on October 27. On Egypt's position, President Abdel Fattah al-Sisi said military support from Egypt would be limited to defending Saudi territory and borders, and would not include attacking Yemen. The statement defines the scope of the support described by the Egyptian president as security risks between Yemen and Saudi Arabia rise. The available facts did not confirm Saudi-Egyptian talks on October 28.

Attention now turns to the OPEC+ meeting scheduled for Sunday, where 3 people familiar with the matter told Reuters that producers are expected to keep oil output targets for December steady. The expected decision concerns that month's production targets, and the available facts do not say it has already been made. The meeting is being watched as concerns linked to the Ras Tanura announcement have moved oil prices, despite the lack of confirmation that the refinery was hit. The shipping terminal and the complex's location on the Gulf west of the Strait of Hormuz are among the factors that make the site sensitive in the context of oil trade. December output will depend on what OPEC+ members decide at Sunday's meeting.