WASHINGTON (92 News) – US President Donald Trump on Monday said that the US was locked and loaded for a potential response to the attack on Saudi Arabia’s oil facilities.
In his tweet, Trump said he approved the release of oil from the US Strategic Petroleum Reserve (SPR) if needed in a quantity to be determined due to the attack.
It is pertinent to mention here that the attack on plants in the heartland of Saudi Arabia's oil industry, including the world's biggest petroleum-processing facility at Abqaiq, came from the direction of Iran, and cruise missiles may have been used, according to a senior US official. Initial reports indicated the attack came from Yemen.
Oil prices increased after attack on Saudi oil facilities
Oil prices increased on Monday more than 15 per cent to their highest level in nearly four months after an attack on Saudi Arabia’s oil facilities that knocked out more than 5 per cent of global oil supply.
According to the ‘
Al Jazeera’, Benchmark Brent crude futures surged by as much as 19 per cent to a session high of $71.95 a barrel at the market's open. The Bloomberg news agency said it was the biggest rise in prices on record.
US crude futures surged more than 15 percent to a session high of $63.34 a barrel. Both benchmarks rose to their highest levels since May. Prices were up about 12 percent by 2250 GMT, as gains were capped after US President Donald Trump said he authorised the release of oil from the US Strategic Petroleum Reserve (SPR) if needed in a quantity to be determined because of the attack on Saudi's facilities.
US West Texas Intermediate (WTI) futures climbed by as much as 15.5pc to $63.34 a barrel, the biggest intra-day percentage gain since June 22, 1998. The front-month contract was at $59.73 a barrel, up $4.88, or 8.9pc, at 0343 GMT.
Saudi Arabia is the world's biggest oil exporter and the attack on the state-owned producer Saudi Aramco's processing facilities at Abqaiq and Khurais has cut output by 5.7 million barrels per day. The company has not given a timeline for the resumption of full output.
A source close to the matter told Reuters the return to full oil capacity could take "weeks, not days". Saudi Arabia's oil exports will continue as normal this week as the kingdom taps into stocks from its large storage facilities, an industry source briefed on the developments told Reuters on Sunday.
“How the US and Saudi Arabia deal with the situation will be closely watched," said Margaret Yang, market analyst at CMC Markets in Singapore.
