Energy prices spike after Saudi oil attack as U.S. blames Iran

Weekend attack stopped production of 5.7 million barrels of crude oil a day

FILE - In this Saturday, Sept. 14, 2019 file photo, made from a video broadcast on the Saudi-owned Al-Arabiya satellite news channel, smoke from a fire at the Abqaiq oil processing facility fills the skyline, in Buqyaq, Saudi Arabia. (Al-Arabiya via AP, File)

Global energy prices spiked Monday by a percentage unseen since the 1991 Gulf War after a weekend attack on key oil facilities in Saudi Arabia caused the worst disruption to world supplies on record, further fueling heightened tensions between Iran and the U.S.

American officials released satellite images of the damage at the heart of the kingdom’s crucial Abqaiq oil processing plant and a key oil field, alleging the pattern of destruction suggested Saturday’s attack came from either Iraq or Iran — rather than Yemen, as claimed by Iranian-backed Houthi rebels there. A Saudi military spokesman later made the same accusation, alleging “Iranian weapons” had been used in the assault.

Iran rejected the allegations, with a government spokesman saying now there was “absolutely no chance” of a hoped-for meeting between Iranian President Hassan Rouhani and President Donald Trump at the U.N. General Assembly next week.

For his part, Trump sent mixed signals, saying his “locked and loaded” government waited for Saudi confirmation of Iran being behind the attack while later tweeting that the U.S. didn’t need Mideast oil, “but will help our Allies!”

The tensions have led to fears that action on any side could rapidly escalate a confrontation that’s been raging just below the surface in the wider Persian Gulf in recent months. There already have been mysterious attacks on oil tankers that Washington blames on Tehran, at least one suspected Israeli strike on Shiite forces in Iraq, and the downing of a U.S. military surveillance drone by Iran.

Those tensions have increased ever since Trump pulled the U.S. out of Iran’s 2015 agreement with world powers that curtailed its nuclear activities and the U.S. re-imposed sanctions on the country that sent its economy into freefall.

Benchmark Brent crude gained nearly 20% in the first moments of trading Monday before settling down to over 10% higher as trading continued. A barrel of Brent traded up $6.45 to $66.67.

That spike represented the biggest percentage value jump in Brent crude since the run-up to the 1991 Gulf War that saw a U.S.-led coalition expel Iraqi dictator Saddam Hussein’s forces from Kuwait.

U.S. benchmark West Texas crude was up around 10%. U.S. gasoline and heating oil similarly were up.

The attack halted production of 5.7 million barrels of crude a day, more than half of Saudi Arabia’s global daily exports and more than 5% of the world’s daily crude oil production. Most of that output goes to Asia.

At 5.7 million barrels of crude oil a day, the Saudi disruption would be the greatest on record for world markets, according to figures from the Paris-based International Energy Agency. It just edges out the 5.6 million-barrels-a-day disruption around the time of Iran’s 1979 Islamic Revolution, according to the IEA.

READ MORE: Iran to raise uranium enrichment beyond nuclear deal limits

Though the world’s overall energy demands in the past were smaller, the Saudi outage has sparked concern among analysts of prices pushing to $80 a barrel and beyond. Publicly traded airlines, whose major costs include jet fuel, suffered globally. That could in turn push up prices on everything from travel to a gallon of gas at the pump.

Saudi Arabia has pledged that its stockpiles would keep global markets supplied as it rushes to repair damage at the Abqaiq facility and its Khurais oil field. However, Saudi Aramco has not responded publicly to questions about its facilities.

The Associated Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

 

In this Saturday, Sept. 15, 2019, photo released by Saudi Press Agency, SPA, Saudi Energy Minister Prince Abdulaziz bin Salman, center, visits the Saudi Aramco plants one day after the attacks in Abqaiq, Saudi Arabia. (Saudi Press Agency via AP)

Just Posted

BREAKING: Gabby’s Country Cabaret announces ‘heartbreaking’ permanent closure

Owner Steve Gallagher ‘holds out hope’ of a new future for the 35-year-old nightlife hotspot

Aldergrove’s drive-in theatre stops showing films after 50-car limit comes into effect

Tuesday night was exceptionally quiet at Metro Vancouver’s only drive-in theatre –… Continue reading

More details disclosed about tragic death of Langley Rams player

Saskatchewan Health Authority looking into circumstances surrounding Samwel Uko’s hospital visit

Virtual auction by Langley’s Able Auctions raises $60,000 for charity

An estimated 600 people bid during the online event

VIDEO: Langley Community Music School Fiddlers release series of video recordings

Year-end concert covers include Cripple Creek, Tennessee Waltz, and a bevy of Beatles tunes

BC Ferries losing up to $1.5 million each day as pandemic tanks ridership

The company does not qualify for the wage subsidy

Facing changes together: Your community, your journalists

Thanks for helping the Langley Advance Times to continue its mission to provide trusted local news

Chilliwack school board censures trustee Barry Neufeld after controversial Facebook post

Board chair issues statement on censure but little else regarding Facebook post controversy

Twenty-nine of Canada’s 48 national parks to reopen to day-use visitors June 1

All national parks, historic sites and marine conservation areas have been closed for weeks

JK Rowling publishes first chapters of new story online

Book will be a fairy tale for kids and benefit those particularly affected by the pandemic

BC Corrections to expand list of eligible offenders for early release during pandemic

Non-violent offenders are being considered for early release through risk assessment process

Officials looking for answers after Abbotsford football star found dead in Sask. lake

Saskatchewan Health Authority looking into circumstances surrounding Samwel Uko’s hospital visit

Fraser Valley driver featured on ‘Highway Thru Hell’ TV show dies

Monkhouse died Sunday night of a heartattack, Jamie Davis towing confirmed

Most Read