Aramco oil refinery in Saudi Arabia on fire

Saudi energy giant Saudi Aramco has temporarily shut down its Ras Tanura refinery after the key facility was struck by a drone, escalating fears of wider disruption to the region's vital energy infrastructure.

The strike on Ras Tanura - one of Saudi Arabia's most important refining hubs and a critical export terminal on the Gulf coast - comes at a moment of acute strain for global oil markets already rattled by intensifying conflict in the Middle East.

Crude prices have logged their steepest four-year surge as the widening Iran conflict has effectively paralysed shipping through the Strait of Hormuz, the narrow maritime passage that handles nearly 20% of the world's daily oil flows.

Although Tehran has not formally declared a closure of the strategic waterway, several international shipowners have suspended transits through the corridor, citing mounting security risks. The result has been a de facto bottleneck in one of the world's most critical energy arteries, tightening supply chains and fuelling price volatility.

Energy analysts warn that any prolonged interruption to Gulf exports - particularly if the Strait of Hormuz remains effectively frozen - could sharply tighten global supplies just as demand begins to strengthen in major economies.

Markets reacted swiftly to the latest escalation. Brent crude climbed to $80 a barrel in early trade as traders priced in fresh supply risks from the Gulf. The benchmark has been climbing steadily amid fears that broader regional instability could spill over into production and export facilities across the Middle East.

A sustained supply shock would likely revive inflationary pressures worldwide, complicating efforts by central banks to stabilise economies already grappling with elevated food and energy costs.

The Iran conflict entered a volatile new phase over the weekend when the United States and Israel launched missile strikes on targets across Iran on Saturday, urging citizens to rise against the Islamic regime.

Tehran responded with a barrage of attacks on Israel and on US military bases and other targets in Saudi Arabia, Qatar, United Arab Emirates, Kuwait and Bahrain, raising fears of a broader regional confrontation.

Security experts caution that energy infrastructure — including refineries, export terminals and shipping lanes — may increasingly become targets in the conflict, heightening the risk of further supply disruptions.

For now, markets are bracing for sustained volatility, with investors closely monitoring developments around Ras Tanura and the Strait of Hormuz as tensions continue to mount across the Gulf.