Fault Line Monday: Houthi attacks test oil's Hormuz bypass

• The Saudi-led coalition says it intercepted Houthi missiles and drones aimed at Riyadh, Yanbu, Taif and other cities over the weekend and struck launchers in Yemen. The Houthis say they hit pumping stations on Saudi Arabia's East-West crude pipeline, which Riyadh has not confirmed.
• As of 11:35 AM ET, crude is down about 1.6% and Brent-linked oil about 0.8% from Friday's close, while defense stocks are up about 2.0% and the Saudi stock ETF about 1.1%. Gold, the dollar and long Treasuries are all up less than half a percent.
• Crude is still up about 17.7% since Oct 5, so a lot of risk is already in the price. The next date is Tuesday, when the Kremlin says Putin meets Iran's president and Qatar's emir in Moscow.

If Saudi Arabia confirms damage to the East-West pipeline, crude retakes Friday's highs, energy and defense lead, and the rest of the market sells off into the Fed.

If the Moscow meetings produce a path to talks and the attacks ease, crude keeps giving back its October premium and Saudi stocks extend their rebound.

If interceptions continue but no oil site is hit, oil swings on each headline while stocks wait for Wednesday's Fed decision.

If the Houthis and Iran both escalate at once, brent jumps, havens bid, and the vol proxy reverses its Monday drop.