Oil Prices Spike After Saudi Attack

Oil prices have soared in the aftermath of the September 14 attack by Yemeni rebels on two major oil facilities in Saudi Arabia, which removed more than 5% of global supply.

Brent crude futures had surged by 19.5% to $71.5/b on September 16, as of 04:50 GMT, marking the largest intraday climb since January 1991. US West Texas Intermediate (WTI) futures were up 15.5% at $63.34/b – the largest intraday gain since June 1998.

Brent had closed on September 13 at $60.2/b, while WTI ended trading at $54.8.

The Yemeni drone strike on Saudi Arabia’s Abqaiq oil processing complex – the largest of its kind in the world – as well as the Khurais oilfield, caused the loss of 5.7mn b/day of output, according to state-owned producer Saudi Aramco. All eyes are now on how quickly the Middle Eastern nation can restore this production – whether it is a question of days or weeks. Neither Aramco nor Saudi authorities have provided guidance.

Meanwhile, the US has been quick to pin the blame for the attack on Iran, which has been supporting the Yemeni Houthis rebels that have claimed responsibility.

“There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from [Saudi Arabia] as to who they believe was the cause of this attack, and under what terms we would proceed,” US president Donald Trump tweeted on the evening of September 15.