As the fires still burn at Saudi Arabia's giant Abqaiq oil processing plant, attention has turned to the immediate impact on oil prices. The missile or drone attack, blamed by the United States on Iranian allies in either Yemen or more likely Iraq, has temporarily knocked out half of the Saudi oil processing capacity. But more important than the near-term effect is what the attack reveals about the outlook for the conflict between Saudi Arabia and Iran.

The strike is the latest in a series against Saudi and United Arab Emirates (UAE) petroleum assets. But the previous incidents were more in the way of calibrated warnings: slight damage to four ships at the UAE port of Fujairah, drone attacks on the Saudi east-west pipeline in May, and explosions on two tankers in the Gulf of Oman in June. Missiles from Houthi forces in Yemen have struck other non-oil facilities, such as airports. But the size, sophistication and target of this attack represents a major escalation, and the first really to shock world oil markets.