Saudi Aramco has shut its Jazan oil refinery, capacity 400,000 barrels per day, after a Houthi missile and drone attack that satellite imagery showed started a fire at the site. The shutdown lands while Saudi Arabia reroutes crude exports away from the Bab el-Mandeb Strait, and while Oman pitches Iran a shared management plan for the Strait of Hormuz.
Saudi Aramco has closed its Jazan oil refinery following an attack by Houthi forces, according to a report from social media source @WatcherGuru cited by Crypto Briefing. The plant carries a capacity of 400,000 barrels per day, a significant component of Saudi Arabia's refining infrastructure.
That attack involved missiles and drones, with satellite imagery confirming a fire at the site, marking a renewed campaign against Saudi energy facilities. Crypto Briefing reported the market appears to read the disruption as potentially significant for WTI crude oil prices, with the likelihood of upward pressure.
Saudi crude swings away from Bab el-Mandeb
Meanwhile, more than half a dozen empty supertankers are en route to Egypt's Sidi Kerir port to pick up Saudi crude. At least eight very large crude carriers are signalling Sidi Kerir as their destination, all expected to arrive in the coming two to three weeks, according to vessel-tracking data compiled by Bloomberg.
The Houthis announced a blockade on Saudi shipments in the southern Red Sea and Bab el-Mandeb Strait last week, and Saudi Arabia has since shuttled more crude from Yanbu to the Egyptian port of Ain Sukhna, then onward through the SUMED onshore pipeline to Sidi Kerir. No observable tankers sat at Yanbu as of early Tuesday, likely because tankers have started to switch off transponders to avoid becoming Houthi targets.
Traffic through Bab el-Mandeb slumped to a multi-month low on Sunday. Crossings at the Strait of Hormuz remain subdued at a two-month low, and the U.S.-Iran de-escalation has not abated operators' fears of running tankers at either chokepoint.
Oman offers Iran a shared Hormuz mechanism
Separately, Oman has presented Iran a proposal for a joint regional mechanism to manage the Strait of Hormuz with voluntary fees, a Gulf source told Reuters on Tuesday. The plan has regional backing and was presented to Iranian officials in Tehran over the weekend, under which Iran would not exercise sole control of the waterway.
Oman based the mechanism on the Strait of Malacca, jointly managed by Indonesia, Malaysia and Singapore, with users voluntarily contributing to a fund that finances navigation management, environmental protection and search and rescue. Hormuz carried a fifth of global oil and liquefied natural gas before the conflict, and managing it has become the main hurdle in talks to end the Iran war.
Yet the two sides remain apart. Iran has said the strait cannot go back to its pre-war status where shipping flowed freely, while Gulf states insist there be no mandatory payment of fees to Iran.
On Monday, Foreign Minister Abbas Araqchi discussed the Strait of Hormuz with his Omani and Saudi counterparts. According to Iran's foreign ministry statement, he emphasised the need to "strengthen cooperation and advance joint diplomatic efforts to establish stability in the region".
President Donald Trump said on Monday the United States was having good talks with Iran and there was a chance of a deal, but he warned that U.S. strikes would resume if the negotiations failed to deliver.
Sources: Crypto Briefing, Oilprice.com, Investing.com
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