Oil prices have risen over 20% as a result of two drone attacks on a major facility in Saudi Arabia.
The attacks, for which the Yemeni Houthis rebel group claims responsibility, on Saturday wiped out more than 5% of the world’s total oil supply.
Brent crude oil jumped more than 20% to $71.95 per barrel, while the price of US oil also rose. However, US President Donald Trump authorised the release of US reserves which tempered the increases.
Brent crude is currently sitting around 10% higher at $66.64 per barrel.
The drone attacks hit the world’s largest petroleum processing facility and a nearby oil field, both of which are owned and operated by Aramco, one of the world’s biggest energy companies. Those two facilities account for around 50% of Saudi Arabia’s entire production output.
Although the Houthis group claims it is behind the missile attack, the US believes it has data which suggests it was led by Iran, which it denies. US Secretary of State Mike Pompeo accused Tehran of “deceit”, while Mr Trump has said the US is “locked and loaded” to launch a military response, but wanted to hear from the Saudis on how they’d like to proceed.
Speaking to the BBC, energy policy expert professor Nick Butler, said: “The direct impact of the attacks could be short-lived.
“The market has adjusted without blinking over the last two years to the loss for political reasons of over two millions barrels a day of production from Venezuela and Iran.”