Saudi Arabia destroyed several drones targeting oil infrastructure in its eastern province and areas near Riyadh on July 27. The defense ministry attributed the attacks to Iran-backed militias operating from Iraqi territory, with no damage or casualties reported. Three drones had been intercepted previously on May 17-18, 2026, and attacks have escalated since late February. Riyadh called on Baghdad to prevent its territory from being used as a launchpad, while Iraq denied direct involvement. No immediate market reaction occurred as production remained uninterrupted. Markets are closely watching Iraq’s stance on militia activity, Saudi Arabia’s response options, and the broader energy supply picture, particularly in relation to OPEC decisions and seasonal demand patterns.
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