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Reuters
NEW YORK
Oil prices jumped roughly 12% on Monday after an attack on Saudi Arabian crude oil facilities over the weekend sliced the kingdom’s production in half and intensified concerns of retaliatory actions in the Middle East.
Prices initially surged about 20% after the open on Sunday evening, with Brent crude posting its biggest intraday gain since the 1990-1991 Gulf crisis, before pulling back as various nations said they would tap emergency supplies to keep the world supplied with oil.
Brent crude futures rose as much as 19.5% to $71.95 per barrel, the biggest intraday jump since Jan. 14, 1991. By 12:09 p.m. EDT (1607 GMT), the international benchmark was up $7.19, or 11.9%, at $67.41 a barrel.
U.S. West Texas Intermediate (WTI) futures climbed as much as 15.5% to $63.34, the biggest intraday percentage gain since June 22, 1998. WTI was last trading $6.30, or 11.5%, higher at $61.15 a barrel.
Oil futures climbed after the Saudi-led military coalition battling Yemen’s Houthi movement said the attack was carried out with Iranian weapons, raising the prospect of a global conflict involving the United States and Iran.
Saudi Arabia is the world’s biggest oil exporter and, with its comparatively large spare capacity, has been the supplier of last resort for decades.
The attack on state-owned producer Saudi Aramco’s crude-processing facilities at Abqaiq and Khurais cut output by 5.7 million barrels per day and threw into question its ability to maintain oil exports. The company has not given a timeline for the resumption of full output.
Two sources briefed on Aramco’s operations said a full return to normal production “may take months.” “The attack on Saudi Arabian production facilities exposed their vulnerabilities, and as a result, the oil market is now pricing in additional geopolitical and security risk,” said Andy Lipow, president of Lipow Oil Associates in Houston.
President Donald Trump approved the release of oil from the U.S. Strategic Petroleum Reserve, which helped limit gains in oil prices.
Trump also said Washington was “locked and loaded” to hit to respond to the strike, and the threat of retaliation and an escalation of tensions in the Middle East may keep prices elevated, regardless of any relief from global stockpiles.
“This justifies a risk premium on the oil price, so prices are initially unlikely to return to the levels at which they were trading before the attacks,” said Carsten Fritsch, oil analyst at Commerzbank in Frankfurt, Germany.
NEW YORK
Oil prices jumped roughly 12% on Monday after an attack on Saudi Arabian crude oil facilities over the weekend sliced the kingdom’s production in half and intensified concerns of retaliatory actions in the Middle East.
Prices initially surged about 20% after the open on Sunday evening, with Brent crude posting its biggest intraday gain since the 1990-1991 Gulf crisis, before pulling back as various nations said they would tap emergency supplies to keep the world supplied with oil.
Brent crude futures rose as much as 19.5% to $71.95 per barrel, the biggest intraday jump since Jan. 14, 1991. By 12:09 p.m. EDT (1607 GMT), the international benchmark was up $7.19, or 11.9%, at $67.41 a barrel.
U.S. West Texas Intermediate (WTI) futures climbed as much as 15.5% to $63.34, the biggest intraday percentage gain since June 22, 1998. WTI was last trading $6.30, or 11.5%, higher at $61.15 a barrel.
Oil futures climbed after the Saudi-led military coalition battling Yemen’s Houthi movement said the attack was carried out with Iranian weapons, raising the prospect of a global conflict involving the United States and Iran.
Saudi Arabia is the world’s biggest oil exporter and, with its comparatively large spare capacity, has been the supplier of last resort for decades.
The attack on state-owned producer Saudi Aramco’s crude-processing facilities at Abqaiq and Khurais cut output by 5.7 million barrels per day and threw into question its ability to maintain oil exports. The company has not given a timeline for the resumption of full output.
Two sources briefed on Aramco’s operations said a full return to normal production “may take months.” “The attack on Saudi Arabian production facilities exposed their vulnerabilities, and as a result, the oil market is now pricing in additional geopolitical and security risk,” said Andy Lipow, president of Lipow Oil Associates in Houston.
President Donald Trump approved the release of oil from the U.S. Strategic Petroleum Reserve, which helped limit gains in oil prices.
Trump also said Washington was “locked and loaded” to hit to respond to the strike, and the threat of retaliation and an escalation of tensions in the Middle East may keep prices elevated, regardless of any relief from global stockpiles.
“This justifies a risk premium on the oil price, so prices are initially unlikely to return to the levels at which they were trading before the attacks,” said Carsten Fritsch, oil analyst at Commerzbank in Frankfurt, Germany.
