Melius Sees Oil Prices Climbing on Extended Jizan Plant Shutdown

Melius Research attributes the recent rise in oil prices to intensifying conflict in the Gulf region, specifically pointing to the extended shutdown of a major Saudi Arabian facility.

The Jizan complex has now been offline for six weeks, laying bare weaknesses in Middle East energy infrastructure. According to Melius Research, persistent security threats are prolonging essential repair work well beyond the downtime seen in previous one-off incidents at installations like Abqaiq and Ras Tanura.

Jizan houses a 400,000-barrel-per-day oil refinery and a power station feeding the local electricity grid. This dual-use configuration elevates the facility's strategic significance for regional energy supply.

The shutdown is putting additional strain on an already tight global oil market, Melius Research says. The firm points out that U.S. inventories of refined fuels are still low, while Brent crude has climbed to around $98 per barrel.

Melius attributes the prevailing price levels to the drop in refining capacity caused by the Jizan outage paired with ongoing supply restrictions across the global energy market.

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