Oil Prices Jump After Houthi Strikes and Iranian Shipping Attacks

October 23 ------ The continued Houthi attacks on Saudi energy targets prompted a jump in oil prices, driving Brent futures upwards to nearly $113 by the market close in New York.

In an already-tight global supply situation, Saudi Arabia's energy ministry reported Wednesday that air defenses had intercepted a drone at the Shaybah oil field, located in the shifting dunes of the Empty Quarter. The unmanned aircraft had attempted to strike a processing facility at the processing plant. It was shot down outside of the perimeter fence, the ministry said, but debris hit a vehicle belonging to a contractor. One Philippine national and one Nepali national were killed, and two other workers - one Pakistani and one Indian - were injured, the ministry said.

Two others were killed in a parallel attack on King Fahd International Airport in Dammam, a frequent target of Houthi strikes. "These treacherous attacks reflect the terrorist Houthi militia's persistence in continuing its criminal approach of targeting civilians and vital facilities," said Jasem Mohamed Albudaiwi, Secretary General of the Gulf Cooperation Council (GCC) in a statement.

The series of Houthi strikes within Saudi Arabia have prompted the U.S. State Department to order the departure of non-essential diplomatic staff for safety purposes. Saudi Aramco has also ordered the evacuation of its headquarters at Dhahran, which was hit by a Houthi strike earlier this month.

Shaybah's operations were not affected by Wednesday's attack, Saudi officials said, but the prospect of damaging strikes at the facility helped propel oil prices upwards. The field produces one million barrels per day, and the market has been undersupplied for months. Gulf export volumes have only just recovered to prewar levels within the past week.

Separately, the government of Iran claimed that three tankers hit naval mines near the Strait of Hormuz, and that four more were struck by kinetic attacks in the Arabian Gulf during ship-to-ship transfer operations. An STS evolution is a particularly vulnerable moment for tankers to take incoming fire, with filled hoses on deck, no chance of maneuvering, and the prospect of a two-vessel simultaneous casualty.

Source: maritime-executive.com