The higher open fits a market rebuilding risk premium on Saudi supply after a run of strikes, and smoke near the capital’s airport shifts the perceived boundary of the conflict even without reported damage. The Yanbu claim would matter more for flows than the Riyadh incident if verified, because it points at Saudi Arabia’s Red Sea export outlets, the alternative to the Gulf route. Washington’s signal that it will not join offensive strikes cuts both ways: it lowers the odds of a broader escalation, but leaves the Houthi campaign against Saudi Arabia unchecked in the near term. Traders will look to the Asian open to see whether the bid holds, since thin Sunday-evening trade can exaggerate a headline-driven move.
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Oil is bid on the open as the Houthi conflict reaches Riyadh, with smoke near the airport, an intercepted missile and Washington saying it will not join offensive strikes.
Summary:
- Oil prices opened higher on Globex in Sunday evening trade, with the reported attack on Riyadh among the factors traders are weighing.
- Saudi civil defence sent overnight alerts on Saturday warning of aerial attacks in Riyadh and Al-Kharj. Saudi air defences intercepted a missile launched toward the capital at dawn, and Saudi-led coalition forces said the Houthis had tried to hit Riyadh with a ballistic missile.
- Residents heard at least one explosion, and footage showed black smoke near King Khalid International Airport, where flights were severely disrupted. No casualties or damage were reported, according to the Associated Press.
- The Iran-backed Houthis claimed missile and drone attacks on “sensitive” sites in Riyadh and an attack on an Aramco facility in the Red Sea city of Yanbu. It is unclear what they targeted in the capital.
- It was the first targeting of Riyadh since the latest Saudi-Houthi escalation opened another front in the wider Iran war. The Houthis have been attacking Saudi Arabia since declaring a naval blockade against Riyadh in July.
- Washington has signalled it does not intend to join offensive strikes against the rebels.
- US military says Hormuz oil and LNG shipments hit six-month high, cite mine clearance
Oil prices opened higher on Globex in Sunday evening trade, with a reported attack on Riyadh among the factors traders are weighing after Yemen’s Houthis carried their conflict with Saudi Arabia to the capital. Saudi civil defence sent overnight phone alerts on Saturday warning of possible aerial attacks in Riyadh and in Al-Kharj, a city east of the capital. According to Gulf News, Saudi air defences intercepted a missile launched toward Riyadh at dawn, and Sky News reported that Saudi-led coalition forces later confirmed the rebels had tried to hit the capital with a ballistic missile.
Residents reported at least one explosion, and footage showed a pillar of black smoke with the main terminal building of King Khalid International Airport in the foreground. Flights at the airport were severely disrupted. The Associated Press reported no casualties or damage, although the Wall Street Journal had earlier reported, citing three officials, that an air strike hit jet fuel facilities at the airport.
The Houthis claimed responsibility for missile and drone attacks on what they called “sensitive” sites in Riyadh, and said they had also attacked a facility of oil company Aramco in the Red Sea city of Yanbu. It is unclear what they targeted in the capital, and the Yanbu claim was not confirmed in the reports reviewed. The Houthis control the most populous parts of Yemen and much of the north, and have been attacking Saudi Arabia since declaring a naval blockade against Riyadh in July. The attack was the first on Riyadh since the latest escalation between Saudi Arabia and the Houthis opened another front in the wider Iran war. Washington has signalled that it does not intend to join offensive strikes against the rebels.
That is the backdrop for oil’s higher open, and it is investingLive’s read rather than a confirmed cause. The significance for traders lies less in any damage, which was not reported, than in proximity: an attack reaching the Saudi capital, together with a claim against an Aramco site, raises the question of whether Saudi energy infrastructure and export routes are next. It arrives after drone attacks linked to the Iran war halted a Saudi pipeline that bypasses the Strait of Hormuz, and while Iran still maintains the strait is closed. Against that, US Central Command said on Saturday that shipments through Hormuz had reached a six-month high, and Saudi forces intercepted the missile, which limits the immediate supply impact.
The signposts are whether attacks on Saudi targets are repeated, whether the Yanbu claim is verified, and whether Washington’s stance on the Houthis changes. A quiet Monday would suggest the premium fades, while a further strike near Saudi energy assets would argue for it holding.
This article was written by Eamonn Sheridan at investinglive.com.