Oil prices soar after attacks on Saudi plant

PTI

Buqyaq: FILE - This Saturday, Sept. 14, 2019, satellite image from Planet Labs Inc., shows thick black smoke rising from Saudi Aramco's Abqaiq oil processing facility in Buqyaq, Saudi Arabia.The weekend drone attack on one of the world’s largest crude oil processing plants that dramatically cut into global oil supplies is the most visible sign yet of how Aramco’s stability and security is directly linked to that of its owner -- the Saudi government and its ruling family. (PTI photo)

Buqyaq: FILE – This Saturday, Sept. 14, 2019, satellite image from Planet Labs Inc., shows thick black smoke rising from Saudi Aramco’s Abqaiq oil processing facility in Buqyaq, Saudi Arabia. (PTI photo)

Oil prices surged more than 10 per cent on Monday after attacks on two Saudi Arabian plants that slashed output in the world’s top producer by half, with Donald Trump blaming Iran and raising the possibility of a military strike on the country.

West Texas Intermediate jumped 10.68 per cent to USD 60.71 and Brent climbed 11.77 per cent to USD 67.31 in early Asia trading following the blasts at facilities run by state-owned giant Aramco.

The attack by Tehran-backed Houthi rebels in neighbouring Yemen, where a Saudi-led coalition is bogged down in a five-year war, effectively shut down six per cent of the global oil supply.

Brent soared almost 20 per cent at one point on Monday, while WTI surged around 15 per cent before paring the gains.

Donald Trump said Sunday the US was “locked and loaded” to respond to the attack, while Secretary of State Mike Pompeo said: “The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression.”

Tehran denies the accusations but the news has revived fears of a conflict in the tinderbox Middle East after a series of attacks on oil tankers earlier this year that were also blamed on Iran.

(PTI)