Global oil supply is under threat, with prices rising by around 12% on Monday.
This is following attacks on Saudi Arabian crude oil facilities over the weekend, which effectively cut the kingdom’s production in half.
According to Reuters news agency, Saudi Arabia is the world’s biggest oil exporter and, with its comparatively large spare capacity, has been the supplier of last resort for decades.
The attack on state-owned producer Saudi Aramco’s crude-processing facilities at Abqaiq and Khurais cut output by 5.7 million barrels per day.
“The attack on Saudi Arabian production facilities exposed their vulnerabilities, and as a result the oil market is now pricing in additional geopolitical and security risk,” said Andy Lipow, president of Lipow Oil Associates in Houston.
