Markets
The Houthis Say They Hit the Rabigh Refinery and the East-West Pipeline. Oil Reopens on Sunday Evening With Nothing Confirmed
Yemen's Houthis said on Saturday they had attacked eight Saudi targets, including the Rabigh refinery, the East-West Pipeline and Riyadh's airport. Saudi authorities confirmed intercepting two ballistic missiles but no damage to oil sites. Brent settled Friday at $116.72, its highest since April. The weekend's claims will be priced in one opening print when futures reopen on Sunday evening.
The list ran to eight targets. Their military spokesman, Yahya Saree, said on Saturday, October 24, that the group had struck King Khalid International Airport in Riyadh, an Aramco facility in Yanbu, the Rabigh refinery, crude oil pumping stations, the East-West Pipeline, King Fahd International Airport in Dammam, an airport in Najran and an air base at Khamis Mushait, France 24 and Reuters reported. Saudi authorities did not comment directly on the claims. The Saudi-led coalition said it destroyed two ballistic missiles fired towards Yanbu and Taif, and the Civil Defense issued brief alerts for Taif, Yanbu, Mecca and Jeddah before saying, about ten minutes later, that the threat had passed.
What reached the ground was debris. Fragments of intercepted missiles fell in Jeddah, Taif and Rabigh and in the Mecca region, according to Saudi Civil Defense, and Saudi Arabia said the missiles had been aimed at Mecca and Medina, which the Houthis denied, saying they target oil facilities and military bases and announce their attacks publicly. In Yemen, the Saudi-backed government said three Houthi ballistic missiles hit coast guard sites in Aden. The group also renewed its warning to airlines and travellers to avoid Riyadh's airport, which it called a military target, hours after Saudi authorities announced plans to split it into two terminals; operations there had been suspended after a Houthi-claimed attack on October 10 that reportedly killed 13 people.
The targets matter more than the count. The East-West Pipeline carries crude about 1,200 kilometres from the oil fields of the Eastern Province to Yanbu on the Red Sea, and it is Saudi Arabia's way of exporting without passing through the Strait of Hormuz; Aramco raised its capacity to about 7 million barrels a day in 2019. Rabigh, on the same coast north of Jeddah, is one of the kingdom's large refining and petrochemical complexes. A confirmed hit on either would move the market more than another attack on an airport, which is why the absence of confirmation is the most important fact of the weekend so far.
The price going into it was already high. December Brent rose 3.1% on Friday to settle at $116.72 a barrel, its highest close since April and up more than 85% this year, and December WTI rose 3.8% to $103.27, leaving a $13.45 gap that says the risk is being priced in seaborne crude rather than in American supply. The January Brent contract, which takes over as the benchmark when December expires on October 30, settled at $111.70, so buyers were paying about $5 more for barrels delivered a month sooner. Energy was the only S&P 500 sector at a record on Friday.
Oil futures closed on Friday afternoon and reopen on Sunday evening, New York time, so two days of claims and interceptions arrive in a single print. The last time a weekend attack on Saudi oil reached the market that way, in September 2019 after the strike on Abqaiq, Brent opened with a jump of as much as 19.5%; that attack had taken out 5.7 million barrels a day of output. This one, on Sunday morning, had taken out nothing that anyone outside the Houthi leadership could confirm. The opening print will show how much the market is willing to pay for the difference.