Saudi oil attacks cause price wobble

Source: CNN

Investigators from Saudi Arabia and the United States of America have determined “with very high probability” that the weekend attack on the Saudi oil industry was launched from an Iranian base in Iran close to the border with Iraq.

What happened?
Ten drones performed co-ordinated strikes on key Saudi Arabian oil facilities knocked out half of the country’s oil capacity — more than 5-million barrels a day. This amounts to about 5% of the world’s supply. Saudi and US investigators have determined “with very high probability” that the attack came from an Iranian base, according to a source.

Who’s behind this?
Yemen’s Houthi rebels said they’re responsible for the attacks, but a spokesperson for the Saudi-led coalition in Yemen said that Iranian weapons were used in the oil field attack.

Where the US stands
President Trump said it looks like Iran was behind the attack but suggested it was too early to say for sure. Trump also insisted that he does not want war with Iran.

How it’s affecting oil
On Monday, US oil prices spiked by more than 14%. It was the biggest spike since January 2009.
Oil prices dropped sharply Tuesday, following Monday’s surge that sent shock waves around the world.

US oil futures dropped 4.6% to $59.98 per barrel, following a Reuters report that Saudi Arabian oil production would return to normal within two to three weeks. Investors took that as a positive sign about the impact of the weekend’s attacks on global oil supply.

Brent crude, the international benchmark, is down 5.8% at $64.99 a barrel.

How it could affect South Africans
According to Fin24, a strong rand rally over the past week put the petrol price on track for a cut in the first week of October. This would mean petrol price cuts of between 11c an 24c a litre.

The Automobile Association spokesperson Layton Beard says the massive increase in the global oil price will likely cancel out the forecast price cut.

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