Houthi Missile and Drone Attacks Strike Saudi Oil Facilities

Iran-backed Houthi rebels launched dozens of missiles and drones at Saudi Arabia, striking energy infrastructure including facilities operated by Saudi Aramco, the state oil giant that produces about 10 million barrels a day and supplies roughly 10% of the world’s total oil demand. The escalation renewed risks to Saudi energy infrastructure and Red Sea shipping as the broader Middle East conflict continues to constrain oil flows through the Strait of Hormuz.

The attacks hit the southern Saudi Arabian cities of Jazan, Najran, Abha and Khamis Mushait, wounding 73 people and sparking fires at energy facilities and utilities that forced some operations to stop, according to Saudi officials, adding that emergency teams are working to contain fires at the sites and assess the extent of the damage.

The attacks mark a renewed escalation in hostilities between Saudi Arabia and the Houthis. Since declaring a naval blockade against Saudi Arabia in July, the group has launched attacks toward the kingdom and targeted Saudi vessels in the Red Sea. The 400,000-barrel-per-day Jazan refinery on Saudi Arabia’s Red Sea coast has also faced repeated attacks, adding to concerns about the security of the kingdom’s western energy infrastructure and export routes.

“The outcome will affect freedom of navigation through one of the world’s most important maritime chokepoints and the ability of both Iran and the Houthis to threaten international shipping,” wrote Danny Citrinowicz at the Institute for National Security Studies in Tel Aviv on X.

Meanwhile, tensions between the U.S. and Iran have intensified. Iran launched a missile attack on a U.S. Navy ship Monday after firing ballistic missiles at an aircraft carrier and guided-missile destroyer over the weekend, the Wall Street Journal reported, citing U.S. officials. The weekend attacks prompted the U.S. to strike three Iranian tankers it said were helping finance Iran’s military and proxy groups. The U.S. then launched new attacks on Iranian oil tankers Tuesday after Tehran again attempted to strike a U.S. warship in the region. None of the U.S. warships were hit, but officials said the attacks have raised concerns that Iran may be using more sophisticated weapons and could be receiving assistance from China or Russia.

The escalation comes as the strategic importance of the Bab al-Mandeb Strait grows amid Iran’s effective closure of the Strait of Hormuz, which carried about 20% of the world’s oil before the conflict began in February.

According to the Energy Information Administration, oil and petroleum liquids moving through the Strait of Hormuz fell to 4.9 million barrels per day in the second quarter of 2026, compared with 21.6 million barrels per day before the conflict. Over the same period, traffic through the Bab el-Mandeb averaged 8.1 million barrels per day as Saudi Arabia redirected more crude away from Hormuz.

Goldman Sachs said a prolonged disruption to Middle East oil production and shipping could push prices substantially higher. The bank estimates Brent could exceed $120 per barrel in 2027 if Gulf crude production remains 4 million barrels per day below prewar levels, although that is not its base-case scenario.

“We view more intense shipping attacks in Hormuz and the Red Sea as the most likely driver of this lower-output, higher-price scenario,” Daan Struyven, head of oil research at Goldman said, adding that “markets are increasingly pricing a prolonged Mideast conflict.” Goldman Sachs expects disruptions to Middle East shipping to persist into 2027, with production gradually recovering by the second half of 2027.