You must have heard about the drone attacks that took place at the Saudi Aramco units last week. It is known that these drone attacks were well-planned and co-ordinated while the purpose of this attacks has not been known yet. Nonetheless, it is also known that the drone attacks have been successful in achieving one purpose – increasing global oil prices. Saudi Arabia, which is the biggest oil supplier globally, wanted to increase prices of the oil per barrel which were slumping.
However, these drone attacks have done what Saudi Arabia wanted but hurting them at the same time. These drone attacks targeted almost half of the facilities in the Saudi Aramco. According to an estimate, about 10% of the global oil is supplied by Saudi Arabia to the World. Therefore, about 5% of the global oil supply has been disrupted by the drone attacks and it might take more than a few months to get the supply back to normal.
Now, it is known that oil prices have gone up significantly due to this reason. As the markets opened on Monday morning, it was seen that the oil prices in global markets rose by about 10% as compared to last week. This is the highest that the oil prices have risen since May of this year. Since the global oil supply has been affected, US President Donald Trump also said that he had authorized to use oil from the country’s emergency reserves “if needed”. He also mentioned that he would use enough oil “to keep the markets well-supplied.”
Chief Oil Analyst for Oil Price Information Service, Tom Kloza, said that “This is a big deal,” “It is the biggest shock to the oil markets since [Hurricane] Katrina. And like Katrina it will likely haunt us for months, at least weeks.” He said that the oil prices are likely to “creep up” in the coming months and will continue until the US holiday season.
