On Monday, the oil market saw a surge in its prices after Saturday’s attack on Saudi Aramco’s oil facilities.
The attacks on the oil facilities in Saudi Arabia managed to slash the output of oil by 50 percent in the country and affects the global oil supply by six percent. On Monday the oil prices surged over 10 percent, in the early Asia trading saw West Texas Intermediate jumped 10.68 percent to 60.71 US Dollars and Brent climbed 11.77 percent to 67.31 US Dollars.
The attacks managed to cut down the Saudi Aramco out by 5.7 barrels per day. In a report by Reuters, a source claims it would take ‘weeks’ for the country to return to its full oil capacity.
It is reported that the attacks on the facilities were done by Houthi rebels who have claimed responsibility. The United States of America has openly blamed Iran for the matter with US Secretary of State Mike Pompeo tweeted that no evidence of Houthi involvement was found.
According to a report by Al Jazeera, a senior US official said that attacks on the plants came from the direction of Iran and a possibility of Cruise Missiles may not be ruled out.
The attacks would have an impact on the valuation of Saudi Aramco as it was preparing itself for an initial public offering. On Sunday, US President Donald Trump said the US was prepared to respond to the attacks. While Iran has denied having any involvement with the attacks on the facilites.
According to a report by Al Jazeera, the US president had also authorized its Strategic Petroleum Reserves to disperse oil in the market if needed in quantity.
Saudi Arabia has also tapped its reserves in order to compensate for the losses in production. The country has been involved in a coalition which has been fighting the Houthi rebels in Yamen since 2015.
This is the latest in a string of attacks on the oil market with earlier incidents involving attacks on oil carriers through the Strait of Hormuz, the earlier attacks on the oil infrastructure in Saudi Arabia.
The Middle-East is in a fix given the new developments in the region. The ongoing crisis between Saudi Arabia and Iran are going to have a tough time given that the escalations between the two will be on a nerve wreaking high after the attacks on Saturday.
Saudi Arabia has often accused Iran of arming the Houthi rebels in Yamen, a charge which Iran categorically denies.
(Inputs from agencies)