Fallout Spreads Across the Middle East as the Iran War Grinds On

As the Iran war drags on, the fallout extends throughout the Middle East. On Thursday, Yemeni Houthis reportedly launched two drone attacks on Saudi Aramco's Jazan refinery, causing minimal damage to a storage tank. This marks the third attack on the Red Sea facility since July 25. The Houthis have also threatened to blockade Saudi oil flows and engaged in attacks against Saudi targets and shipping in the Bab al-Mandeb.

Meanwhile, the US-Iran conflict has reignited civil war in Yemen, following a 2022 truce that ended large-scale fighting between Houthi rebels and Saudi-backed forces. Iran recently attacked two vessels linked to the UAE's state-owned ADNOC in the Hormuz Strait, though no injuries were reported. The U.S. can potentially blockade Iran indefinitely, but the strain on military resources is becoming evident, with sailors experiencing mental health issues and supply shortages on the USS George Washington.

Iran faces increasing pressure, but a stalemate looms as neither side is willing to break the deadlock. Washington has shifted its primary focus to keeping oil prices low, relegating the threat of nuclear weapons to a secondary priority. In the realm of oil exploration, Mexico is considering shale development in only two basins, Burgos and Sabinas-Burro-Picachos, pending sufficient deep saline water for fracking.

Greenland has delayed Arctic oil drilling plans due to environmental and social review delays. Egypt has opened 14 new oil and gas blocks to international bidding, hoping to tap an estimated 11 trillion cubic feet of reserves, while Libya and Tunisia have revived an offshore oil and gas bidding round in a maritime border dispute.

Lastly, Argentina's YPF has submitted a $51 billion LNG project to President Milei's RIGI investment program, aiming to produce gas from the Vaca Muerta formation and export it via floating LNG plants.