Oil prices jumped shortly after trading began on Monday after an attack on Saudi Arabia's oil facilities on Saturday, which knocked out more than five percent of global oil supplies and halted production of more than half of Saudi Arabia's daily exports.
Brent crude futures jumped to close to 20%, the highest rate of profit during the day since the Gulf War in 1991, to the start of the $ 71.95 barrel on opening while US crude futures jumped over 15% to a maximum of $ 63.34 a barrel. Both indicators rose to their highest since May.
State-owned oil giant Saudi Aramko said the attack reduced production by 5.7 million barrels of crude oil per day. He did not give a timeline for the resumption of production, only saying that work to restore production was in progress. He said Saturday he would provide an update in 48 hours.
As news of the attacks broke, Secretary of State Mike Pompeo reassured that the US would work with its partners and allies to make sure energy markets remained well stocked.
At the end of Sunday, President Donald Trump also tried to control fears, saying he was authorizing the release of oil from the US Strategic Petroleum Reserve (SPR), if necessary, in an amount to be reserved. the market is well stocked after the attacks.
US Secretary of Energy Rick Perry also said on Monday that the oil market is sustainable and will respond positively to the attack on the Saudi Arabian oil industry.
But the attacks added concern for the stability of the world's oil reserves.
Bloomberg reported on Monday that the collapse caused by Saturday's attacks exceeded the loss of Kuwaiti and Iraqi oil production in August 1990, when Saddam Hussein invaded his neighbor. He said he also outweighed the loss of Iran's oil production as a result of the 1979 Islamic Revolution.
"Saudi Arabia has been a very reliable oil supplier in the world," Jim Burkhard, who directs crude oil exploration for IHS Markit, told the Associated Press. The attack is "adding a geopolitical premium back to the price of oil," he said, meaning prices will rise because of concerns about more unrest and possible future attacks threatening global oil supplies.
On Saturday, Yemen-backed Iranian rebel Houthis claimed responsibility for attacks on Saudi Arabian oil infrastructure, saying their drones hit Saudi oil refineries in Abqaiq and Khurais.
However, the US pointed its finger at Iran, another major oil producer and geopolitical player, with Pompeo saying that "There is no evidence that the attacks came from Yemen." Iran has denied any responsibility.
Although there is no immediate threat of a military response from Saudi Arabia or the United States, uncertainty over possible retaliation is eroding the markets.  President Trump on Sunday said the US was "locked and loaded" after it became clear who was behind the attacks.
Experts agree that the long-term effect on oil prices will diminish depending on how quickly Saudi Arabia resumes production.
"The price jump is a natural knee-jerk reaction, but the way forward and the ability to maintain elevated levels remains dependent on the duration of the interruption," Michael Tran, managing director of energy strategy at RBC Capital Markets in New York, told Reuters.
Goldman Sachs Senior Commodity Strategist Damian Kurvalin told oilprice.com that he expects Brent oil prices to drop over $ 75 a barrel if the current outage lasts more than six weeks, a level he believes that the release of a strategic oil reserve large enough to balance such a deficit for a few months and limit prices to such levels is likely to be realized.
The attack on Saudi Arabia is more important than anywhere else because the rest of the world's ability to compensate for any interference is limited and they are the largest exporter of crude globally, energy analyst Bernadet Johnson told Enverus in an email nt message to NBC News.
Johnson said that the vulnerability of Saudi Arabia's oil production to such an attack was "surprising" and the magnitude of the interruption was "huge compared to other supply interruptions we have seen," but the real question is how [19659002"IftheymanagetogetproductionbackonlinebyMondayglobalcrudestockscaneasilybearthelossandthepricecanjumpinjustafewdays"Johnsonsaid"IfdeliveriesaremuchlongerthanMondayweshouldexpectabigjumpinpricesuntilthefieldsreturn"
When it comes to crude oil reserves, Johnson said recently on Thursday, the International Energy Agency (IEA) warned of the likelihood of continued stockpiling (as a result of global oversupply) above already high levels.
"The world has reserves that could easily cope with weeks or months of interruptions from Saudi Arabia,
In response to Saturday's attacks, the IEA said they were in contact with the Saudi authorities and major producer and consumer countries, but assured that markets were sufficiently stocked with "sufficient trading supplies."  However, Johnson said the attacks were a "double whammy" – no significant oil supply was lost, but it did happen in Saudi Arabia, where the world usually sought backup atsitet to fill the gap.