Oil prices soar more than 10% after Saudi plant attacks

Representative image.

Oil prices surged more than 10 per cent today after attacks on two Saudi Arabian plants that slashed output in the world’s top producer by half, with Donald Trump blaming Iran and raising the possibility of a military strike on the country. West Texas Intermediate jumped 10.68 per cent to 60.71 per cent and Brent climbed 11.77 per cent to 67.31  per cent in early Asia trading following the blasts at facilities run by state-owned giant Aramco.

The attack by Tehran-backed Huthi rebels in neighbouring Yemen, where a Saudi-led coalition is bogged down in a five-year war, effectively shut down six per cent of the global oil supply. Brent soared almost 20 per cent at one point today, while WTI surged around 15 per cent before paring the gains. 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 has 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. “Tensions in the Middle East are rising quickly, meaning this story will continue to reverberate this week even after the knee-jerk panic in oil markets this morning,” said Jeffrey Halley, senior market analyst at OANDA.