Saudi Arabia's Aramco Ras Tanura refinery hit by drone strike, shuts down; Brent Crude rises 9%

Saudi Arabia's Aramco, the state oil giant, shut down its Ras Tanura oil refinery on Monday as a precautionary measure after an Iranian drone strike caused a fire at the facility, Reuters and Bloomberg report. An industry source told Reuters that the situation was under control.

Reports of the closure sent Brent crude oil prices up by 9.32%.

Unverified videos circulating on social media showed thick plumes of smoke billowing out of the facility, though no casualties have been reported.

Aramco has not yet officially confirmed the development.

Brent crude prices rise

Brent crude price rose sharply on the back of the news of the Aramco refinery shutdown, going back near the $80/bbl level. It later consolidated to $77.51 per barrel, rising by about 7% through the day.

Brent crude price was already up on the news of the war in Iran, as Tehran struck multiple Middle East countries with drones following US and Israel strikes on the country that killed its Supreme Leader, Ayatollah Ali Khamenei.

Oil surged by the most in four years as traders gauged the impact of the effective closure of the Strait of Hormuz, prompted by the US and Israeli strikes on Iran.

Tanker traffic through the strait — the chokepoint off Iran’s coast that handles a fifth of the world’s oil and large volumes of gas — has largely halted, with a self-imposed pause in place by shipowners and traders as the conflict spreads.

US President Donald Trump told The New York Times the assault could last “four or five weeks.”

This has fuelled fresh worries about how long the chokepoint will actually be closed. About 10% of the world’s gasoil trade and 20% of jet fuel, or kerosene, flows through Hormuz, according to ship-tracking and analytics firm Kpler.

Exports of refined products through the Strait of Hormuz averaged 3.5 million barrels a day last year, Goldman Sachs said in a note.

As well as being major crude exporters, countries like Saudi Arabia, the United Arab Emirates (UAE) and Kuwait are home to state-of-the-art refineries that produce diesel, jet fuel and petrochemicals. Iran, meanwhile, is one of the world’s biggest sources of fuel oil.

During its opening on Monday, Brent crude oil traded 13% up — the most since January 2025. However, the prices later consolidated as Iran announced no official closure of the Strait of Hormuz.

Still, shipowners and traders have imposed a self-imposed pause as the conflict spreads.

While Iranian authorities said on Sunday that the key waterway remained open, they also said they had attacked three oil tankers.

In reaction to the widening conflict, OPEC agreed at a pre-arranged weekend meeting to raise quotas next month by 206,000 barrels a day. The group — which includes Iran, as well as Saudi Arabia and Russia — had been expected to resume modest hikes before the outbreak of hostilities on Saturday.