Oil prices are experiencing an exponential growth post the Saudi oil attack at the prime oil facilities of Abqaiq and Khurais facility. US authorities, on Sunday, held Iran responsible for the attack, even though Yemenis Houthi Rebels have taken the responsibility for the attack.
The attack carried out on Saturday has impacted 50 percent of Saudi’s daily oil production capacity amounting to more than 5 percent of daily oil production across the globe.
Globally accepted benchmark, Brent Crude experienced a rise of whopping 19 percent to close at $71.95 a barrel, on Monday. On the other hand, U.S. West Texas Intermediate saw a raise of more than 15 percent, acquiring the highest price of the session, $63.34 a barrel.
Speaking on the adverse impacts of the Saudi oil attack, Alan Gelder, Vice President for refining, chemicals and oil markets at Wood Mackenzie said, “This attack has material implications for the oil market, as a loss of 5 million barrels per day of supplies from Saudi Arabia cannot be met for long by existing inventories and the limited spare capacity of the other OPEC+ group members.”
Earlier on Sunday, President Donald Trump took to social network and said, “Saudi Arabia oil supply was attacked. There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!”
In response to Saudi oil attack, White House organized a meeting with National Security Council following Trump’s tweet. The meeting included Vice President Mike Pence, Secretary of State Mike Pompeo and Defense Secretary Mark Esper.
A US official on conditions of anonymity claimed, while the council is contemplating on every possible move, it was unable to reach a decision on Sunday.
Spokesperson for the Iranian Foreign Ministry, Abbas Mousavi said, “The Americans adopted the ‘maximum pressure’ policy against Iran, which, due to its failure, is leaning toward ‘maximum lies.
Such blind accusations and inappropriate comments in a diplomatic context are incomprehensible and meaningless. Even hostility needs a certain degree of credibility and reasonable frameworks, US officials have also violated these basic principles.”
Validifying their reasons for blaming Iran for Saudi oil attack, the US authorities claim that it is not feasible to strike 19 targets with 10 drones, if claims of the Yemenis Houthis are to be considered. They added that Houthis could not have been behind the attack as it was carried out on the oil facilities which are located on the northwest side of Yemen.
Although, it will take days to reinstate majority of the oil production, still the facilities at Saudi Arabia will take couple of weeks to achieve their maximum capacity. However, it is , yet to be seen what future implications might arise due to existing lack of oil production including the already strained US-Iran relations.