Oil Prices Surge Following Attack On Saudi Oil Industry

Saudi oil output is down 50%.

Oil prices have surged following the attack on the Saudi oil industry over the weekend.

After drones hit the Abqaiq oil processing facility, in addition to the Khurais oil field, Saudi Arabia’s oil output dropped by 5.7 million barrels.

That drop equals half of Saudi Arabia’s oil output.

The attacks caused a surge in the price of oil, with Brent Crude spiking by the largest amount in history, up 19.5% in the intraday. The rise was since pared back to about 10%.

The Canadian Crude Index was up just under 10% as of this being written.

Prices dropped further, though still remaining high, when US President Donald Trump said he would be deploying America’s strategic oil reserves.

“Based on the attack on Saudi Arabia, which may have an impact on oil prices, I have authorized the release of oil from the Strategic Petroleum Reserve, if needed, in a to-be-determined amount….”

“….sufficient to keep the markets well-supplied. I have also informed all appropriate agencies to expedite approvals of the oil pipelines currently in the permitting process in Texas and various other States”

Houthi rebels in Yemen have stated that they are responsible for the attack. Meanwhile, the US is blaming Iran.

Continuing instability and the rising threat of war in the middle east could cause long-term spikes in oil prices, extending beyond the current supply disruption.

Spencer Fernando

Photo – Twitter

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