The strike that did not remove a single barrel: why did oil not move as the headlines suggested?

Executive summary

• The facts are correct, but the connections are not. Energy facilities in south-west Saudi Arabia were targeted on 7 and 8 September, and 73 civilians were injured in four cities — Abha, Khamis Mushait, Jazan and Najran. These injuries occurred in the cities, not at the refinery; no source placed a single casualty inside the Jazan facility.
• The strike did not remove an additional barrel. The Jazan refinery has been offline since 27 July, or 43 days before the strike, and its exports fell from 163,000 tonnes in July to zero in August. The strike hit an idle asset.
• Nor did Brent reach one hundred dollars in any settlement. It closed at 97.00 dollars on 7 September, up 0.75%, and at 97.80 dollars on 8 September, up 0.82%. A move of less than one per cent is not pricing a supply loss.
• Every record in refining margins was set before the strike. The US ultra-low-sulphur diesel margin exceeded one hundred dollars for the first time at 101.86 dollars on 18 August, while the Platts US Gulf Coast assessment recorded 98.15 dollars on 1 September — six to twenty days before the strike.
• The real reason for its prominence is not Saudi. The disruption to the Strait of Hormuz, which was closed again on 30 August, nine days before the strike, affects about 4 million barrels a day of middle distillates — ten times Jazan’s full nameplate capacity.
• And what EL7 alone has: since mid-June, the refiner basket has risen 59.9% against 11.0% for integrated companies — a gap of 48.9 percentage points that held across each of the six base dates we tested — and this gap was built in May and June, before the Hormuz wave and before Jazan went dark.