A Reuters source is reporting that Saudi Aramco’s Ras Tanura refinery, which is the largest oil refinery in the Middle East, was hit by a drone attack and forced to shut down as a precautionary measure. The source did note that the “situation is under control” though.

However, the strike continues to highlight the kind of disruption that is hitting the oil market at the open. It’s not just all about the Strait of Hormuz. There’s tension and fears all over the region and oil refineries and tankers everywhere have to be mindful about the situation.

I would say it still isn’t clear what is Iran’s playbook in all of this. You would expect them to hit back at countries with US presence but they seem to be just trying to create a disruption everywhere all at once. Is it all a ploy to try and cause enough chaos so that other countries in the region want the attacks, including those from the US and Israel, to stop? Perhaps.

Oil prices remain elevated and have been coming up after a bit of profit taking in Asia trading earlier. WTI crude is now up nearly 8% on the day again at $72.68. With how much there was a premium in the run up to the conflict here in the weeks before, are we really going to see oil hit above $100? Keep a very, very close watch on the Strait of Hormuz situation.

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