Saudi Arabian plants attack on September 16, Monday, that sliced output in the world’s top producer by half, with President Donald Trump indicting Iran and setting up the possibility of a military strike on the country, oil prices climbed up more than 10 percent. The two plants attacked affected the production of oil in Saudi.
Following the blow-up at facilities run by state-owned giant Aramco, West Texas Intermediate jumped up to 10.68 percent to US Dollars 60.71 and Brent climbed to 11.77 percent to US Dollars 67.31 in early Asia trading.
Six percent of the global oil supply was effectively shut down after the attack by Tehran-backed Huthi rebels in neighboring Yemen, where a Saudi-led coalition is bogged down in a five-year war.
Brent rose almost 20 percent at one point on Monday, while West Texas Intermediate pushed up around 15 percent before cutting down the gains.
On Sunday, Trump said that the US was “locked and loaded” to respond to the attack on the Saudi Arabian Plants, while Secretary of State, Mike Pompeo said that the United States will work with their allies and partners to ensure that energy markets will remain well supplied and that Iran is held liable for its aggressive reaction.
After a series of attacks on oil tankers of Saudi Arabia plants earlier this year that was also blamed on Iran, Tehran denies the accusations of the government, but the news has revived fears of a conflict in the tinderbox the Middle East.
Jeffrey Halley, the senior market analyst at Olsen and Associates (OANDA) said that the tensions in the Middle East are rising rapidly and uncontrollably, which means that this dreadful attacks stories will continue to make noise in the news this week even after the knee jerk panic in oil markets last Monday, September 16.