SATURDAY, 19 OCT 2019

 

CONNECT

Facebook Linked In Twitter
Leptos_Blue_Marine_23/09-23/11_728x90px
Baker_Tilly_18/10-19/12_266x90px
IMH LTD

Nikos Christodoulides: Stresses Need for A Political Resolution of the Conflict in Syria

Cyprus President Anastasiades Welcomes Solidarity Expressed by The European Council

IMH LTD
GAP_Group_2019_468x60px

INTERNATIONAL

brought to you by CIPA

Oil Prices Soar After Attacks On Saudi Facilities

Oil Prices Soar After Attacks On Saudi Facilities

Oil prices surged by nearly 20% after two attacks on Saudi Arabian facilities on Saturday knocked out more than 5% of the world's supply, the BBC reports.

Brent crude, the international benchmark used by oil traders, jumped to $71.95 a barrel at one point. US oil prices also spiked, but both trimmed gains as President Donald Trump authorised the release of US reserves.

The strike, which the US blames on Iran, has sparked fears of increased risk to energy supplies in the region. The price of Brent crude is currently up about 10% at $66.64 a barrel, while West Texas Intermediate is 9.5% higher at $60.06 after rising as much as 15% earlier.

The drone attacks on plants in the heartland of Saudi Arabia's oil industry hit the world's biggest petroleum-processing facility as well as a nearby oil field, both of which are operated by energy giant Aramco.

Together they account for about 50% of Saudi Arabia's oil output, or 5% of daily global oil production. It could take weeks before the facilities are fully back on line. Aneeka Gupta, commodities strategist at the fund manager Wisdom Tree, says that higher oil prices would not have an immediate impact on consumers as they "could take a bit of time of feed through".

However, she says that if the outage lasts for more than six weeks, oil prices could hit "north of" $75 a barrel.

US Secretary of State Mike Pompeo claimed that Tehran was behind the attacks. Iran accused the US of "deceit."

Later Mr Trump said in a tweet the US knew who the culprit was and was "locked and loaded" but waiting to hear from the Saudis about how they wanted to proceed.

Will petrol prices rise?

Drivers will not immediately see an increase at the pump, according to international energy policy expert Prof Nick Butler.

"The direct impact of the attacks could be short-lived," he said. "The market has adjusted without blinking over the last two years to the loss for political reasons of over two million barrels a day of production from Venezuela and Iran."

In the UK, 40% of the price of a litre of petrol is made up of oil, fuel production and profit. The rest is tax.

"There are currently savings in the wholesale price that have only just started to be passed on to drivers by retailers," says industry expert Simon Williams from automotive services company RAC Limited.

"Many retailers cut their prices by 3p on Friday and we believe that average prices were six pence too high before that, so the impact of these fires may not be too great." However, if the drone attacks stoke broader tensions in the region, price rises could prove to be more sustained.

 

Prof Butler said that "if retaliation becomes a reality, any spike could be sustained feeding the risk of an economic recession".

What will be the impact on oil supplies?

The Saudis have provided little detail about the attacks, apart from saying there were no casualties, but have given a few more indications about oil production.

Energy Minister Prince Abdulaziz bin Salman said some of the fall in production would be made up by tapping huge storage facilities.

The kingdom is the world's biggest oil exporter, shipping more than seven million barrels daily. Saudi stocks stood at 188 million barrels in June, according to official data.

"Saudi authorities have claimed to control the fires, but this falls far short of extinguishing them," said Abhishek Kumar, head of analytics at Interfax Energy in London. "The damage to facilities at Abqaiq and Khurais appears to be extensive, and it may be weeks before oil supplies are normalised."

Saudi Arabia is expected to use its reserves so that exports can continue as normal this week.

What are the US accusations?

Mr Pompeo said Tehran was behind the damaging attacks but gave no specific evidence to back up his accusations. He has rejected claims by Yemen's Iran-backed Houthi rebels that they carried out the attacks.

Iran accused the US of "deceit" and its Foreign Minister Javad Zarif said that "blaming Iran won't end the disaster" in Yemen.

Yemen has been at war since 2015, when President Abdrabbuh Mansour Hadi was forced to flee the capital Sanaa by the Houthis. Saudi Arabia backs President Hadi, and has led a coalition of regional countries against the rebels.

The US meanwhile has blamed Iran for other attacks on oil supplies in the region this year, amid continuing tension following Mr Trump's decision to reinstate sanctions after abandoning the landmark international deal which limited Tehran's nuclear activities.

MORE ON INTERNATIONAL

Boris Johnson and EU Reach Brexit Deal Without DUP Backing

UK PM announces ‘great deal that takes back control’ despite refusal of DUP ...

Brexit Talks Continue After Boris Johnson Makes Concessions on Irish Border

Prime minister fighting to get Democratic Unionists to back deal with Brussels, The ...

ASOS Profits Plunge in 'Disappointing' Year

Profits at Asos have plunged after warehouse problems led to what the online fashion ...

FROM AROUND GOLDNEWS

   

Financial Services Digital Transformation Forum

Tradesocio is organizing the Financial Services Digital Transformation Forum on Tuesday 26th of November 2019 at the Four Seasons Hotel, in Limassol. ...
   

Turkey to suspend Syria offensive 'to allow Kurdish withdrawal'

Turkey has agreed to a ceasefire in northern Syria to let Kurdish-led forces withdraw, BBC reports. The deal came after US Vice-President Mike Pence and ...
   

Cyprus President Anastasiades Welcomes Solidarity Expressed by The European Council

The President of the Republic of Cyprus, Nicos Anastasiades has welcomed the European solidarity expressed by the European Council and the adoption by the ...
   

Nikos Christodoulides: Stresses Need for A Political Resolution of the Conflict in Syria

Any agreement terminating illegal actions is a particularly positive development, Cyprus Foreign Minister Nikos Christodoulides said on Friday, underlining the ...
   

Elias Neocleous: The Significance of Technology

Elias Neocleous highlighted at the 10th Limassol Economic Forum the issues shaping the agenda of business leaders on the professional services. Firstly, the ...
   

Panicos Nicolaou: The Key for Banks is to Identify Ways to Transform

Panicos Nicolaou, CEO at Bank of Cyprus spoke at the 10th Limassol Economic focusing on where European banking is today and pointed out the structural ...
   

Nicos S. Kyriakides: Challenges in the Professional Services Industry

Nicos S. Kyriakides, Partner and Head of Financial Advisory Services, Deloitte Cyprus, spoke at the 10th Limassol Economic Forum about the issues shaping the ...
   

GOLD Magazine: Investment Services in Cyprus

The investment services sector in Cyprus has been steadily growing in recent years and, since 2012, the volume of assets under management has almost tripled, ...
 

YOUR COMMENTS

HEADLINES

MOST POPULAR

Millennials_Summit_16/10-20/11_300x250px
GloriaJeans_300x250px

IMH LTD