As armed clashes between the United States and Israel and Iran intensify, key energy infrastructure in Saudi Arabia and Kuwait came under drone attack, forcing partial shutdowns. With the flames of a full-scale Middle East war spreading to major oil producers' refineries, the international energy market is plunging into extreme turmoil.
Saudi Ministry of National Defense Spokesperson Turki al-Maliki said on the 2nd (local time) that two drones attempting to attack the world's largest refinery complex in Ras Tanura on the eastern coast were intercepted and destroyed in the morning. The Saudi Ministry of Energy said it halted operations at parts of the facility as a preventive measure, and that a limited fire caused by falling debris from the intercepted drones is now under control. The Ras Tanura facility processes more than 500,000 barrels of crude a day and serves as a key diesel supply source for Europe.
The same day, Kuwait's Ahmadi refinery also came under a drone attack. Debris from a downed drone fell into the facility, injuring two workers on site.
News that energy infrastructure was directly hit sent global financial markets swinging immediately. ICE diesel futures prices soared more than 20% intraday from the prior session, and London Brent crude neared $80 a barrel, rising more than 10%. Early in the session, it briefly broke above $82. With maritime traffic in the Strait of Hormuz effectively paralyzed and refined fuel supply chains now threatened, market fear is spreading intensely.
On the perpetrator of the attacks, an Iranian military official drew a line, saying, "Refineries in regional countries are not operational targets of the Iranian military," while warning, "All U.S. and Israeli assets in the region are considered legitimate targets and will be attacked," leaving open the possibility of further strikes.