Oil Prices Set To Hit Record High After Saudi Drone Attacks 1

Oil Prices Set To Hit Record High After Saudi Drone Attacks

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Last week oil refinery stations and oil fields in Saudi Arabia were hit by drones which caused a huge loss of oil and is now set to affect the oil prices in the market.

Oil prices spiked nearly 20% following a drone attack on a processing facility and an oil field in Saudi Arabia. The Saturday attacks cut over 5% of global supply and sent Brent crude surging as markets opened Monday — the most since trading began in 1988 before paring down slightly.

Saudi’s national oil company Aramco was set to restore two million barrels by today, reported The Wall Street Journal, citing anonymous sources. President Trump also authorized the release of oil from the U.S.’ strategic reserve — if needed.

Futures retreated slightly after US President Donald Trump said he had authorized the use of oil from the country’s emergency reserve. In a series of tweets, Trump said that he had ordered that oil from the Strategic Petroleum Reserve, or SPR, be used “if needed.” He said he would use enough oil “to keep the markets well-supplied.”

Oil Prices Set To Hit Record High After Saudi Drone Attacks 2
The drone attacks happened on Saturday and the prices will be high till normal supply is assured. (Image Credit: bloomberg)
Even so, US oil futures were trading at more than $61 a barrel during Asia hours — a spike of nearly 10%. Earlier, the price jumped as much as 15%. Futures of Brent crude, the global benchmark, traded at nearly $68 per barrel, an 11% increase.
Gasoline futures, meanwhile, were up about 9%.
Oil prices had been in a slump. Brent closed at $60.22 per barrel on Friday, down from a high of $74.57 in April. The price closely followed in the United States, known as WTI, closed at $54.85, a 17% drop from April’s highs.
Saudi Arabia, the world’s largest oil exporter, had cut back on production of crude and other energy products as part of an OPEC effort to boost prices. The kingdom produces approximately 10% of the total global supply of 100 million barrels per day.
Saturday’s coordinated drone strikes on key Saudi Arabian oil facilities disrupted about half of the kingdom’s oil capacity, or 5% of the daily global oil supply. The location is the world’s largest oil processing plant. Saudi Energy Minister Prince Abdulaziz bin Salman said that 5.7 million barrels a day of crude oil and gas production have been affected.
Fuel prices in Africa and particularly landlocked countries may go even higher given all the taxes that they need to pay and so we advise citizens of such to be very vigilant and all.
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