A barrel of Brent trades up $6 to $66.28. At 5.7 million barrels of crude oil a day, the Saudi disruption would be the greatest on record for world markets.
Global energy prices spiked on Monday after a weekend attack on key oil facilities in Saudi Arabia caused the worst disruption to world supplies on record, an assault for which President Donald Trump warned that the US was “locked and loaded” to respond.
Benchmark Brent crude gained nearly 20% in the first moments of trading Monday before settling down to 10% higher as trading continued. A barrel of Brent traded up $6 to $66.28.
US benchmark West Texas crude was up around 9%. US gasoline and heating oil similarly were up over 8% and 7% respectively before markets opened in New York.
Saturday’s 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.
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.
Stabilization means processing so-called sour crude oil into sweet crude. That allows it to be transported onto transshipment points on the Persian Gulf and the Red Sea, or to refineries for local production.
The attack “damaged five to seven spheroids and five out of 10 stabilization towers,” said Fernando Ferreira, the director of geopolitical risk at the Washington-based Rapidan Energy Group.
“[Five] or so stabilization towers appear to be destroyed and will have to be rebuilt – this will take many months,” Ferreira said. “The sophisticated attack now seems likely to reduce Abqaiq’s 7 (million barrels of crude oil a day) capacity for an indefinite period” measured in months.
Saudi Aramco did not respond to questions from The Associated Press regarding damage at Abqaiq and the satellite images.