Strikes in Saudi Arabia Seen as Major Escalation

Houthi strikes on oil facilities in southern Saudi Arabia threaten to expand the Iran war in a substantial way, reports Reuters. The strikes are big reason why crude prices climbed back near $100 a barrel on Tuesday morning. The Iran-aligned group said it hit a Saudi airbase and multiple Aramco sites in four cities using drones and missiles. NASA satellite images showed thick smoke over the Jazan refinery and an oil distribution center in Abha, but tightly controlled conditions on the ground limited independent confirmation. Saudi officials reported fires and about 70 people wounded.

The attacks could keep energy prices elevated by disrupting Saudi oil routes beyond the Strait of Hormuz. "Oil market participants now pricing in a more prolonged disruption to shipping flows," says Hamad Hussain of Capital Economics, per the New York Times. The strikes also threaten to further destabilize the region by reigniting the longstanding fight between Saudi Arabia and the militant group, which is based in Yemen and has been battling for control of that nation for more than a decade. The Saudis, who fear expanded Iranian influence, have led the Arab coalition opposing the group. The kingdom is planning to retaliate, reports CNN, which sees the new hostilities as a "major regional escalation."