Oil prices saw a record surge after attacks on two Saudi facilities slashed output in the world´s top producer by half, fueling fresh geopolitical fears as Donald Trump blamed Iran and raised the possibility of a military strike on the country.
Brent futures surged $12 in the first few minutes of business — the most in dollar terms since they were launched in 1988 and representing a jump of nearly 20 percent.
Both contracts pared the gains but were both still more than 10 percent up.
The attack by Tehran-backed Houthi rebels in neighboring Yemen, where a Saudi-led coalition is bogged down in a five-year war, hit two sites owned by state-run giant Aramco and effectively shut down six percent of the global oil supply.
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 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.
Trump authorized the release of US supplies from its Strategic Petroleum Reserve, while Aramco said more than half of the five million barrels of production lost will be restored by tomorrow.
But the strikes raise concerns about the security of supplies from the world´s biggest producer.
Saudi Arabia is the world’s biggest oil exporter and the attack on state-owned producer Saudi Aramco’s crude processing facilities at Abqaiq and Khurais has cut output by 5.7 million barrels per day.
The company has not given a timeline for the resumption of full output.