Houthi missile sets fire to Saudi Aramco office building in Dhahran as Brent holds near $106

On Tuesday night a missile struck an administrative building of Saudi Aramco in Dhahran, in Saudi Arabia's Eastern Province. The strike started a fire but caused no casualties, The National reported. Before the attack, Yemen's Houthi movement had told Aramco employees and civilians near Saudi oil facilities to evacuate and had called the sites legitimate targets, The New York Times reported. The Saudi-led coalition said its own strikes were aimed at Houthi military capabilities. The Houthi missile followed a coalition strike on an oil facility in Sanaa, the Yemeni capital, by a few hours, according to Al Jazeera. The Financial Times listed the attack on the Aramco headquarters among its top stories of the day.

The market reaction was small. Brent crude rose 0.77% to $106.51 a barrel on Wednesday, and West Texas Intermediate traded near $95, according to Trading Economics. The building that was hit holds offices, not loading terminals or processing plants. Traders are pricing the risk that the next strike could hit physical export capacity instead.

That risk already became real once this autumn. Earlier this month Aramco shut its 400,000-barrel-a-day Jazan refinery after a Houthi attack damaged its gasification unit and storage tanks, IDN Financials reported, citing Reuters. In September China's Xinhua news agency carried Houthi statements that the group had attacked several Saudi targets, including oil facilities, in response to Saudi strikes inside Yemen. Each side describes its own strikes as retaliation for the other's. In a military briefing, the Financial Times noted that Saudi Arabia, despite being one of the world's largest arms buyers, has struggled to keep pace with the tactics of the Houthis, whom the paper describes as backed by Iran.

The Saudi-Houthi exchange is unfolding alongside a second constraint on supply. Tanker rates have reached all-time highs because of the Middle East crisis, and the resulting vessel shortage has left heavy crude oversupplied in the Americas while Asia and Europe face shortages, OilPrice reported. The Institute for the Study of War says Iran appears to be targeting ships that carry out oil transfers between vessels in and near the Strait of Hormuz, the Times of Israel reported. Qatar's gas exports remain limited after Iranian strikes damaged its Ras Laffan site.