Citi on Middle East Conflict - FJElite

Middle East
Iran strikes on Ras Laffan refinery has caused extensive damage to its LNG plant, which could take several weeks or even multiple months to repair, driving a sharp rally in European TTF overnight. UAE has announced disruption at the Habshan gas facilities and a drone attack on a Saudi refinery, the first time a facility on the Red Sea has also been targeted. Note that Saudi Arabia has been using the Red Sea route to continue exports, so production losses has been contained so far.
Should we see a disruption to the Bab el-Mandeb strait, Saudi Arabia loses 70-75% of rerouted exports (5M bbl/day), the single biggest escalation risk, our oil trader warned. Saudi's Samref refinery was another that was threatened by Iran (not yet targeted), which is a key plant that supplies diesel to Europe. As we go to print, Iran local media cites an Iranian lawmaker, who said that the parliament could impose a toll and tax on ships seeking a safe passage on the Strait of Hormuz.

US
Trump has pressed for de-escalation, saying that additional strikes would prompt the US to "massively blow up the entirety" of Iran's South Pars field. VP Vance and top US administration officials will be meeting with oil executives to discuss options to further tame surging fuel prices, after the Jones Act was waived on Wednesday. Japan PM Takaichi is in Washington and will be taking part of bilateral meetings with Trump from 11:00 ET. Takaichi said she expected "an extremely difficult" visit, but will do her best to protect Japan’s national interests.