Houthi Strikes Send Oil Prices Soaring Amid Escalating Middle East Tensions

Tensions in the Middle East continue to escalate as Houthi forces struck Saudi Aramco's Jazan refinery, which processes 400,000 barrels of oil per day. This is one of two major refineries hit in the past 24 hours, with Ukraine also targeting Russia's Antipinsky refinery, which can process up to 9 million tons of crude annually.

The Danish-flagged tanker Torm Innovation, carrying 500,000 barrels of Saudi naphtha, was rerouted via the Suez Canal and around the Cape of Good Hope due to reported strikes on two Saudi tankers. This change in route could significantly increase energy costs if it becomes a permanent shift.

Goldman's Hongcen Wei noted that Beijing has used three measures to address supply disruptions resulting from the Iran conflict: destocking coal, oil, and natural gas; shifting toward coal and renewables; and reducing output in oil- and gas-intensive sectors. With an estimated 1.3-1.4 billion barrels of crude inventories, current stocks provide roughly four months of coverage.

The US bombing campaign against Iran entered its 13th night, with strikes reported on several targets. The EU has imposed a 24-hour Copernicus data blackout over the Gulf of Oman at US request after American commercial imagery providers restricted access.