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)

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)

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

Parksville Golden Oldies Sports Association’s popular walking soccer league was one of several sports programs and activities that were cancelled following provincial health officer Dr. Bonnie Henry’s latest announcement to ban indoor adult team sports. (PQB News file photo)
COVID-19: Parksville Qualicum Beach sports groups frustrated by ban

Provincial health directive discourages indoor sports

371 Alberni Highway, Parksville, where the Quality Foods is currently under construction. In January 2021, 87 new affordable homes will start construction nearby. (Mandy Moraes photo)
Provincial government in support of 87 affordable housing units in Parksville

Construction at Alberni Highway address slated to start in January 2021

The Parksville Community Centre. (PQB News file photo)
City of Parksville offers update on closure of community centre

‘Increasing operating costs and annual subsidies provided by the city have been a concern’

(Black Press file)
RDN strengthens security after being alerted to publicly accessible property ownership information

Regional District of Nanaimo investigates, reports to privacy commissioner after anonymous e-mails

Motorists wait to enter a Fraser Health COVID-19 testing facility, in Surrey, B.C., on Monday, Nov. 9, 2020. THE CANADIAN PRESS/Darryl Dyck
Another 694 diagnosed with COVID-19 in B.C. Thursday

Three more health care outbreaks, 12 deaths

Melissa David, of Parachutes for Pets and her dogs Hudson and Charlie are trying to raise money for a homeless shelter that will allow pets and are seen in Calgary, Alta., Thursday, Feb. 6, 2020.THE CANADIAN PRESS/Jeff McIntosh
‘My only wish:’ Children asking pet charity to help their furry friends at Christmas

Parachutes for Pets says it has received 14 letters from children in the last week t

Melissa Velden and her chef-husband Chris Velden, stand in their dining room at the Flying Apron Inn and Cookery in Summerville, N.S. on Friday, Nov. 20, 2020. The couple is hosting holiday parties with appropriate distancing and other COVID-19 health protocols in place at their restaurant. THE CANADIAN PRESS/Andrew Vaughan
Celebrities, Santa and Zoom part of office holiday parties being held amid COVID-19

Many will send tokens of appreciation to workers or offer time off or cash

Emergency crews used a backhoe loader to clear fire debris from the scene of a fire on Wesley Street Thursday as police and firefighters gathered up propane tanks, stoves and fireplaces used by camp residents to heat tents. (Chris Bush/News Bulletin)
City of Nanaimo dismantles downtown homeless encampment after fire

Four to six tents burned up in Wesley Street fire Thursday, Dec. 3

A demonstrator wears representations of sea lice outside the Fisheries and Oceans Canada offices in downtown Vancouver Sept. 24, demanding more action on the Cohen Commission recommendations to protect wild Fraser River sockeye. (Quinn Bender photo)
First Nations renew call to revoke salmon farm licences

Leadership council implores use of precautionary principle in Discovery Islands

Ten-month-old Aidan Deschamps poses for a photo with his parents Amanda Sully and Adam Deschamps in this undated handout photo. Ten-month-old Aidan Deschamps was the first baby in Canada to be diagnosed with spinal muscular atrophy through Ontario’s newborn screening program. The test was added to the program six days before he was born. THE CANADIAN PRESS/HO, Children’s Hospital Eastern Ontario *MANDATORY CREDIT*
First newborn tested for spinal muscular atrophy in Canada hits new milestones

‘If Aidan had been born any earlier or anywhere else our story would be quite different’

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

BC Ambulance Services reassures people that the service is well staffed and ready to respond. Photo by Don Bodger
BC Ambulance assures the Island community they’re ‘fully staffed’

‘Paramedics are not limited to a geographical area.’ — BCEHS

Most Read