Saudi Aramco has closed its Ras Tanura refinery as a precaution after it was targeted by drones, as the escalation of the Iran war now threatens to engulf the entire Middle East. After this news, crude oil prices increased to $ 80 per barrel.
A Saudi Defense Ministry spokesman said on Al Arabiya TV that two drones were intercepted at the facility, causing limited fire due to debris, and there were no casualties.
The shuttering of Saudi Aramco’s Ras Tanura refinery – one of Saudi Arabia’s largest refineries – is likely to heighten supply concerns as the Strait of Hormuz will be virtually closed. At least three tankers were attacked on the waterway, which carries about a fifth of the world’s crude oil supply daily.
“The attack on Saudi Arabia’s Ras Tanura refinery signals a significant escalation, with the Gulf energy infrastructure now firmly in Iran’s sights,” Torbjorn Soltvedt, chief Middle East analyst at risk intelligence firm Verisk Maplecroft, told Reuters. “The attack is likely to lead to Saudi Arabia and neighboring Gulf states joining US and Israeli military operations against Iran.”
The Ras Tanura complex, located on the kingdom’s Gulf coast, is one of the largest refineries in the Middle East with a capacity of 550,000 barrels per day (bpd) and serves as an important export terminal for Saudi crude oil.
Aramco did not immediately respond to an emailed request for comment.
The drone attack added to a wave of attacks on the region, including Abu Dhabi, Dubai, Doha, Manama and Oman’s commercial port of Duqm. Most oil production in Iraq’s Kurdistan region, which exported about 200,000 bpd to Turkey in February, was shut in over the weekend as a precaution.
Saudi Arabia’s heavily fortified energy facilities have been targeted before, most notably in September 2019 when unprecedented drone and missile attacks on the Abqaiq and Khurais plants temporarily destroyed more than half of the kingdom’s crude oil production and roiled global markets.
Ras Tanura was attacked by Yemen’s Iran-aligned Houthis in 2021, in what Riyadh called a failed attack on global energy security.
crude oil prices
West Texas Intermediate, a light, sweet crude oil produced in the United States, was selling at $72.79 a barrel early Monday, up 8.6% from Friday’s trading price of about $67, according to CME Group data.
According to FactSet, a barrel of Brent crude – the international standard – was trading at $79.41 a barrel early Monday, up 9% from its Friday trading price of $72.87, which was a seven-month high at the time.
Higher global energy prices mean consumers will have to pay more for gasoline at the pump and they will have to pay more for groceries and other goods at a time when many are already feeling the effects of increased inflation.