Saudi Arabia and Houthis exchange fire as air defences intercept attack on oil refinery

July 25 (Reuters) - Air defence systems in Saudi Arabia intercepted two ballistic missiles from Yemen on Saturday targeting oil refineries in Yanbu, Greek security sources told Reuters, as Saudi Arabia and the Iran-aligned Houthis exchanged fire in a new front of the Iran war.

Late on Friday, the Saudi-led coalition in Yemen said it had struck Houthi military sites in the port city of Hodeidah linked to attacks on shipping by the group, which has declared a naval blockade of Saudi Arabia.

Houthi leader Abdul Malik al-Houthi said last week that all Saudi oil and other vital facilities would be targets for the group's missiles and drones if Riyadh escalated its involvement in the conflict.

Saudi Civil Defense, the state's emergency services, had issued warnings for Yanbu, on the Red Sea, and later said the danger had passed. Civil Defense also issued a warning for the port city of Jizan, home to a 400,000 barrel-per-day oil refinery.

There were no immediate official reports of damage, and Saudi state oil giant Aramco did not respond to requests for comment on the incidents.

Reuters verified video shared on social media of a large column of smoke rising from the direction of the Saudi Aramco refinery in Jizan. Two Asia-based trading sources said that they had been informed of some damage at the site.

The Houthis had previously attacked both Yanbu and Jizan in the years before striking a U.N.-brokered ceasefire with Saudi Arabia in 2022 that held until this month.

In 2019, they claimed responsibility for attacks on two key Saudi oil facilities that temporarily knocked out more than half of the kingdom's crude output.

The defence system that intercepted the missiles on Saturday was operated by Greek military personnel, the sources said. Greece has deployed a U.S.-made Patriot air defence battery in Saudi Arabia since 2021 under an agreement to help protect the kingdom's energy infrastructure.

U.S. President Donald Trump on Friday vowed "major military punishment" for Tehran and its Houthi allies in Yemen, after the Houthis said they had struck two Saudi tankers in the Red Sea on Thursday.

The Houthi naval blockade threatens millions of barrels of oil sent by pipeline each day to the Red Sea to skirt Iran's near-total blockade of the Strait of Hormuz.

The Saudi-led coalition said it would continue taking necessary measures to protect its ships and Saudi Arabia's interests, and would respond "uncompromisingly" if the Houthis continued hostile actions.

Yemen's Houthi-run foreign ministry said that the strikes on Hodeidah marked the start of a phase of "escalation for escalation" and held Saudi Arabia responsible for any resulting developments.

Houthi-affiliated Al Masirah TV said the Saudi strikes hit facilities belonging to the state telecommunications corporation in Hodeidah city. The broadcaster also said Saudi forces targeted Kamaran Island, off Yemen's western coast.

Saudi Arabia fought a seven-year war in Yemen starting in 2015 after the Houthi movement seized the capital and drove the internationally recognised government from power.

A truce in 2022 halted most major fighting in a conflict that killed hundreds of thousands of people through violence, hunger and disease.

But the truce has been undermined by Houthi targeting of a Saudi airport on July 13 and the naval blockade.

The Houthis said the airport attack responded to a Saudi attack on an airport under their control and that the naval blockade was a response to a Saudi siege on Yemen, which Saudi Arabia has denied.