Oil prices escalate after Saudi drone strike at Aramco
Drone strikes on Aramco's facilities cause crude oil prices to surge
The drone attack on Saudi Arabia’s largest oil facilities on September 14th, has resulted in disruption of global oil supply, escalating crude oil prices. Yemen’s military rebel group Houthi claimed responsibility for it.
At present Aramco has not specified as to when they would be back to functioning at full capacity. For now it can only be assumed that it would take weeks to do so.
Aramco is the Saudi kingdom’s biggest oil facility. In the early hours of 14th September there were drone strikes at two of their facilities; Abqaiq and Khurais. The extent of the damage was previously unknown. However it is now being said that allegedly 5-6% of the global oil supply is offline. This amounts to about 5.7 million barrels in a day of production.
Global tensions are likely to be anticipated. Crude oil prices rose by 14.6%, with the market closing at $69.02 a barrel. This is apparently a record high.
US President Donald Trump has authorized the release of oil from their Strategic Petroleum Reserve, to cope with the supply shortage. He claims investigations are still underway but believes Iran was behind these drone strikes despite Houthi claiming responsibility.
The global oil shortage can go many ways, and affect several nations all at once. There is no knowing how Saudi Arabia would maintain its export quantity and quality in the coming months. A thorough risk assessment is due in order to determine what kind of domino effect to expect.
Read our previous article:
Saudi Arabia’s biggest oil facilities hit by drone strike
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