Saudi Arabia Vows Retaliation After Iran-Backed Houthis Strike Southern Oil Facilities

Iran-backed Houthi forces in Yemen launched a coordinated wave of ballistic missile and drone attacks across southern Saudi Arabia. The strikes hit oil facilities, utilities and other economic targets, starting fires at several sites and prompting operators to suspend work temporarily. Saudi authorities reported 73 people wounded, including women and children.

The affected area includes a 400,000-barrel-per-day refinery in Jazan on the Red Sea coast. Jazan and other west-coast export points, such as Yanbu, are important because Saudi Arabia has relied more on Red Sea routes after the Strait of Hormuz became effectively blocked earlier in the year. The Houthis have also pushed offensives toward the Bab al-Mandab Strait at the southern entrance to the Red Sea, a chokepoint for maritime oil traffic.

The strikes pushed benchmark oil prices higher on the day of the attacks. Brent crude rose about 2.2% to around $99.16 a barrel, while West Texas Intermediate climbed roughly 3.3% to about $94.46, according to CNBC reporting cited in the coverage. Retail fuel numbers cited by AAA showed the national average for a gallon of regular gasoline at $4.15 and a record diesel average of $5.90.

A Saudi-led coalition spokesman described the strikes as a "serious escalation" and said coalition forces would take necessary operational measures to deter the Houthi militia. The Houthis' military spokesman, Brig. Gen. Yahya Saree, said the group launched dozens of ballistic missiles and drones at oil and economic facilities, characterizing the attacks as retaliation for Saudi strikes inside Yemen, including strikes on Aramco sites and military targets.

Saudi Aramco's CEO, Amin Nasser, earlier said that while the Houthi campaign had caused some production interruptions, it had not resulted in material operational or financial impacts and that operations were expected to be restored quickly. Despite that assessment, the pattern of attacks and temporary shutdowns contributes to market uncertainty while repairs and safety checks are completed.

Before the current conflict expanded, the Strait of Hormuz handled about one-fifth of the world's oil shipments. With Iran's blockade of that passage, Saudi oil exports have shifted more traffic through the Red Sea and Bab al-Mandab. That rerouting makes western export facilities and the southern Red Sea more exposed to Houthi missile and drone campaigns coming out of Yemen.

Expect Saudi operational responses and further military activity in the region, possible additional temporary curtailments at coastal export points, and continued price volatility while facilities are assessed and maritime routes remain contested. Ongoing Houthi targeting of Red Sea infrastructure will keep a premium on security and insurance costs for shipping in the area.