All eyes on oil prices as Saudi races to fix pipeline damage

All eyes on oil prices as Saudi races to fix pipeline damage

Dubai - Attack on Saudi plant, oil field led to the interruption of an estimated 5.7 million barrels of the kingdom's crude oil production per day.



By AP, Reuters

Published: Sun 15 Sep 2019, 11:36 PM

Last updated: Mon 16 Sep 2019, 1:38 AM

A weekend drone attack on Saudi Arabia that cut into global energy supplies and halved the kingdom's oil production threatened on Sunday to fuel a regional crisis, as Iran denied US allegations it launched the assault and tensions remained high over Tehran's collapsing nuclear deal.
Iran called the US claims "maximum lies", while a commander in its paramilitary Revolutionary Guard reiterated its forces could strike US military bases across the Mideast with its arsenal of ballistic missiles.
The attack on Saudi Arabia's Abqaiq plant and its Khurais oil field led to the interruption of an estimated 5.7 million barrels of the kingdom's crude oil production per day, equivalent to over 5 per cent of the world's daily supply. It remains unclear how Riyadh will respond to an attack targeting what analysts describe as the heart of the Saudi oil industry. The oil market could rally by $5-10 per barrel when it opens today and may spike to as high as $100 per barrel if Saudi Arabia fails to quickly resume oil supply, traders and analysts said.
Crude prices would spike by at least $15-20 per barrel in a seven-day disruption scenario and go well into triple digits in a 30-day scenario, said Bob McNally of Rapidan Energy.
Greg Newman, co-CEO of Onyx Commodities, said the market could see a return to $100 per barrel if the issue cannot be resolved in the short term.
Late on Saturday, US Secretary of State Mike Pompeo directly blamed Iran for the Saudi attack on Twitter, without offering evidence to support his claim.
"Amid all the calls for de-escalation, Iran has now launched an unprecedented attack on the world's energy supply," Pompeo wrote. "There is no evidence the attacks came from Yemen."
Iranian Foreign Ministry spokesman Abbas Mousavi on Sunday dismissed Pompeo's remarks as "blind and futile comments".


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