Houthi Attack on Saudi Aramco Refinery Sends Oil Prices Reeling
Oil prices pared losses to less than 1% after reports emerged of Yemen's Houthis targeting a Saudi Aramco refinery with drones. The attack, which occurred in Saudi Arabia's Jazan, was described by the Houthi movement as retaliation for what they called Saudi violations of Yemeni airspace and sovereignty.
The incident sent oil prices plummeting earlier in the day, with Brent futures dropping more than 3% and US West Texas Intermediate (WTI) crude sliding over 3.5%. However, prices stabilized after investors weighed the impact of the attack against data showing a rise in US commercial crude oil inventories.
According to the US Energy Information Administration, US commercial crude oil inventories made their largest weekly gain since January 2023, increasing by 17.4 million barrels to 424.4 million in the week ended August 7. This development limited upward pressure on oil prices, which were also influenced by OPEC's revised forecast for global oil demand growth in 2026.
The International Energy Agency (IEA) predicted a contraction of 1.6 million bpd in consumption this year, citing higher prices and restricted supply due to the US-Israeli war with Iran as key factors.