Houthi strike on Aramco's 400,000-barrel Jazan refinery tests Mecca pact

Iran-backed Houthi forces claimed a drone strike on Saudi Aramco's 400,000-barrel-per-day Jazan refinery Sunday, the second attack on the facility in two weeks, as Brent crude held above $83 a barrel on supply concerns.

"This attack comes in response to the Saudi enemy's drone incursions into the airspace of Saada and Hajjah governorates," Houthi military spokesperson Yahya Saree said on Telegram.

Saudi Arabia's Energy Ministry said firefighters extinguished the blaze at dawn with no injuries, without confirming the cause. The refinery had been shut since July 27 after a previous Houthi attack damaged its Integrated Gasification Combined Cycle complex and tank farm area, according to consultancy IIR. Aramco chief Amin Nasser said last week the attacks caused some production interruptions but no material operational or financial impact.

The strike lands two days after Saudi Arabia, Türkiye and Pakistan signed the Mecca Joint Defence Agreement, which treats an armed attack on any one state as an attack on all three. It also comes as the US-Iran conflict continues to disrupt shipping through the Strait of Hormuz, where traffic fell 33 percent Friday, and as Brent crude futures gained more than 1 percent to close at $83.55 a barrel.

Mecca Pact Faces First Test

The attack provides an early test of whether the trilateral agreement translates from political commitment into action. Türkiye has said the pact targets regional stability and is not directed at Iran or any other specific country. Observers will watch whether Ankara and Islamabad view the Houthi strike as falling under the collective-defense provisions and what form any response might take. The agreement, formalized against the backdrop of mounting regional security threats, seeks to strengthen defense and military cooperation among the three countries and bolster their collective deterrence.

The pact's implementation could carry significant implications for regional security, particularly if attacks on Saudi territory continue. The last time Saudi energy infrastructure faced sustained strikes was in 2019, when attacks on Abqaiq and Khurais temporarily knocked out about 5.7 million barrels per day of production — roughly half of the kingdom's output at the time. Oil prices spiked more than 14 percent in a single day following that incident before retreating as Saudi Arabia restored output within weeks.

Hormuz Talks Complicate Supply Picture

The Jazan attack coincides with negotiations over reopening the Strait of Hormuz, where ship traffic fell 33 percent Friday compared with the prior day, with most vessels using the Iranian route, according to trade intelligence firm Kpler. Brent crude futures gained more than 1 percent to close at $83.55 a barrel, while WTI advanced about 1 percent to settle at $78.18. Both benchmarks fell more than 7 percent for the week as traders weighed the potential for a diplomatic resolution against continued attacks on shipping.

Iranian Foreign Minister Abbas Araghchi said Sunday his country is not engaging in direct talks with the US but that "messages are being exchanged through intermediaries." Iran and Oman are working on an agreement to define transit routes through the strait, with inbound traffic using Iranian waters and outbound traffic using Omani waters. Araghchi cautioned that "talks with Oman do not mean the Strait of Hormuz will be reopened," saying an agreement may be reached but reopening depends on other conditions.

Iran's parliament is reviewing a draft plan that would ban US and Israeli ships from transiting the strait, according to state outlet Fars. On Saturday, Iran laid out sweeping demands for reopening the waterway, including lifting the US naval blockade and sanctions, withdrawing US military forces from the region, paying war reparations, and releasing frozen Iranian assets. US Treasury Secretary Scott Bessent told CNBC on Tuesday that an agreement to open Hormuz with freedom of movement could come as soon as Wednesday.

The Houthis declared a naval blockade on Saudi Arabia in the Red Sea last month, citing what they described as a Saudi siege of Yemen — a claim Riyadh denies. The group has also escalated attacks in Yemen's Marib province, where at least 58 government troops were killed in missile and drone attacks Thursday, according to an army source. Houthi shelling of residential neighborhoods and displacement camps in Marib city killed two civilians and wounded 14 others, Yemeni Health Minister Qasim Buhaibeh said.

UN special envoy Hans Grundberg warned that Yemen faces its greatest risk of renewed large-scale conflict since the UN-brokered truce of April 2022, calling on all parties to exercise restraint and return to good-faith negotiations.

This article is for informational purposes only and does not constitute investment advice.