Global energy prices spiked more than 14 percent Monday after a weekend attack on key oil facilities in Saudi Arabia caused the worst disruption to world supplies on record.
It was an increase on par with the 1991 Gulf War and analysts said heightened tensions in the Middle East could keep prices elevated for the foreseeable future. The wider economic fallout will depend on just how long the Saudi supply disruption lasts.
US crude oil jumped more than $8 to close at $62.90 a barrel, and Brent picked up nearly $9 per barrel, to reach $69.02.
The attack on Saudi Arabia’s largest oil processing plant disrupted more than half of its daily exports, halting 5 percent of world crude oil output.
It followed a string of other attacks in the Gulf, which threatened global oil supplies and stirred tensions in the region. But the scope of the most recent incident was more severe. That’s especially worrying for oil-thirsty Asia, where China, Japan, South Korea, and India are major customers of Saudi oil.
“What got hit is really important and serious, and this is not going to be a ‘We’re fixing it in two days’ kind of thing,” said Amy Myers Jaffe, a senior fellow at the Council for Foreign Relations. “It’s the difference between my stabbing you in the leg or the shoulder, versus stabbing you in the neck.”
Oil prices jump as attack on Saudi Aramco facilities jolts supply