Oil prices rose as much as 20% higher to more than $71.00 a barrel following Saturday’s drone attack on Saudi Arabia’s oil facilities, cutting more than half of the country's oil production.
Blamed on Iran by the US, the attack removed 5% of the country's global supplies and is reportedly the single-worse disruption ever faced by the world’s largest oil exporter.
As around 5.7 million barrels of daily crude production have been lost, traders appear concerned over the extent of the outage and the attack’s geopolitical risks in the global energy sector.
According to data from the U.S Department of Energy, it's the country’s biggest intraday spike on record, surpassing Kuwaiti and Iraqi petroleum supply loss in August 1990 as well as Iran’s oil output in 1970.
The international benchmark, Brent crude oil, jumped almost $12 to trade as much as 19.5% to $71.95 per barrel. As Europe awoke on Monday morning, it went back to $65.21 per barrel, up 8.45%.
US oil prices also spiked. The US benchmark, West Texas Intermediate, climbed as much as 15.5% to $63.64 per barrel before dropping down to $59.25 or up 8%.
Haven assets like golf and US Treasury futures have been affected by the increase in oil prices.
National oil company Saudi Aramco has reportedly aimed to restore around two million barrels or a third of its crude output by today. Some experts believe that the direct impact of the attacks will be shortlived.
The drone attack targeted the Saudi Aramco oil production facilities at both Abqaiq and Khurais. Abqaiq is the world’s largest oil processing facility and pumps more than seven million barrels per day. The latter is the country’s second largest oil field, with a processing capacity of 1.5 million barrels per day.
The Kingdom produced 9.85 million barrels daily as of August of this year and ships more than seven million barrels per day.