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| Oil price spikes after Saudi drone attack causes biggest disruption ever – business live | Oil price spikes after Saudi drone attack causes biggest disruption ever – business live |
| (about 3 hours later) | |
| Over at the White House, Donald Trump has said he hopes to avoid conflict in the Middle East: | |
| Trump said in the Oval Office that the attacks on Saudi oil facilities are being studied but “it’s certainly looking” looking like Iran was responsible. He added that he’d “certainly like to avoid” war, but the military is prepared — and the Saudis would have to contribute $. pic.twitter.com/UaqEOzPEBQ | |
| Pres Trump says it looks like Iran was responsible for the weekend attack on Saudi oil facilities. "We’ll let you know definitively. ... That’s being checked out right now," he told reporters at start of meeting with the Crown Prince of Bahrain. (Pool photo by @AprilDRyan) pic.twitter.com/rpRc1akVKS | |
| Here’s a neat explanation of how a higher oil price could lead to faster inflation and slower global growth: | Here’s a neat explanation of how a higher oil price could lead to faster inflation and slower global growth: |
| Higher oil prices could push global inflation close to 5% @OxfordEconomics pic.twitter.com/9VBbOkIduY | Higher oil prices could push global inflation close to 5% @OxfordEconomics pic.twitter.com/9VBbOkIduY |
| The world urgently needs competent leadership before the crisis in the Middle East boils over, writes foreign affairs commentator Simon Tisdall. | The world urgently needs competent leadership before the crisis in the Middle East boils over, writes foreign affairs commentator Simon Tisdall. |
| He’s particularly critical of the US administration, whose tearing-up of the Iran nuclear deal has escalated tensions in the region, and pushed Tehran into a corner: | He’s particularly critical of the US administration, whose tearing-up of the Iran nuclear deal has escalated tensions in the region, and pushed Tehran into a corner: |
| Warning bells, akin to those used to alert fog-bound mariners steering towards rocks, have been ringing out for months. | Warning bells, akin to those used to alert fog-bound mariners steering towards rocks, have been ringing out for months. |
| They have mostly been ignored. The daunting bill for multiple acts of political insouciance, measured in lives and petrodollars, is now coming due. | They have mostly been ignored. The daunting bill for multiple acts of political insouciance, measured in lives and petrodollars, is now coming due. |
| The world ignored the warning signs – and now the Middle East is on the brink | Simon Tisdall | The world ignored the warning signs – and now the Middle East is on the brink | Simon Tisdall |
| Britain’s FTSE 100 index of blue-chip shares has closed 46 points lower at 7,321 points, a drop of 0.6%. | Britain’s FTSE 100 index of blue-chip shares has closed 46 points lower at 7,321 points, a drop of 0.6%. |
| Stocks wilted in the face of concerns that escalating tensions in the Middle East will hurt global growth, and that higher oil prices will curb consumer spending on other item. | Stocks wilted in the face of concerns that escalating tensions in the Middle East will hurt global growth, and that higher oil prices will curb consumer spending on other item. |
| Financial group Prudential led the fallers, down 3.3%, on fears of lower growth in its Asia-Pacific markets. | Financial group Prudential led the fallers, down 3.3%, on fears of lower growth in its Asia-Pacific markets. |
| IAG, British Airways’ parent company, dropped by 2.7%. | IAG, British Airways’ parent company, dropped by 2.7%. |
| Cruise firm Carnival, which is also vulnerable to recession worries (and also uses plenty of oil!) lost 2.2%. | Cruise firm Carnival, which is also vulnerable to recession worries (and also uses plenty of oil!) lost 2.2%. |
| Oil companies, though, ended the day at the top - BP jumped by 4% and Royal Dutch Shell gained 2% | Oil companies, though, ended the day at the top - BP jumped by 4% and Royal Dutch Shell gained 2% |
| My colleagues Richard Partington and Jillian Ambrose have written about today’s oil spike: | My colleagues Richard Partington and Jillian Ambrose have written about today’s oil spike: |
| The Saudi oil attacks have triggered the steepest petroleum market price surge in 30 years and stoked fears for the global economy. | The Saudi oil attacks have triggered the steepest petroleum market price surge in 30 years and stoked fears for the global economy. |
| The attacks on Saudi Arabia’s oil infrastructure led to the biggest jump in global prices since 1988 by wiping out 5.7m barrels of production a day – 5% of the world’s oil supply. | The attacks on Saudi Arabia’s oil infrastructure led to the biggest jump in global prices since 1988 by wiping out 5.7m barrels of production a day – 5% of the world’s oil supply. |
| The price of Brent crude surged by more than $12 (£9.60) a barrel within seconds as trading began in London, quickly breaching the $70 a barrel mark. | The price of Brent crude surged by more than $12 (£9.60) a barrel within seconds as trading began in London, quickly breaching the $70 a barrel mark. |
| The energy price shock reverberated through global markets, driving up shares in energy companies on the prospect of higher profits, while stock exchanges across Europe plunged into the red as investors took fright over rising geopolitical tensions. | The energy price shock reverberated through global markets, driving up shares in energy companies on the prospect of higher profits, while stock exchanges across Europe plunged into the red as investors took fright over rising geopolitical tensions. |
| Oil market analysts claim prices could surge towards $100 a barrel in the coming weeks if Middle East tensions reignite disruption in the strait of Hormuz, a key transit route for the world’s oil tankers. | Oil market analysts claim prices could surge towards $100 a barrel in the coming weeks if Middle East tensions reignite disruption in the strait of Hormuz, a key transit route for the world’s oil tankers. |
| A Middle East energy crisis could be a boon for US shale producers, but threatens to tip the stumbling global economy into a major recession by stemming supply to Asian economies. | A Middle East energy crisis could be a boon for US shale producers, but threatens to tip the stumbling global economy into a major recession by stemming supply to Asian economies. |
| Donald Trump said the US was “locked and loaded” to retaliate and could authorise the release of US oil reserves to help balance the market. But energy experts cast doubt on whether US fracking companies would be able to fill the gap left by Saudi oil production plants. | Donald Trump said the US was “locked and loaded” to retaliate and could authorise the release of US oil reserves to help balance the market. But energy experts cast doubt on whether US fracking companies would be able to fill the gap left by Saudi oil production plants. |
| Bjørnar Tonhaugen, the head of oil markets at Rystad Energy, said the world was “not even close” to being able to replace Saudi exports. | Bjørnar Tonhaugen, the head of oil markets at Rystad Energy, said the world was “not even close” to being able to replace Saudi exports. |
| Saudi oil attacks push prices up by highest amount since 1988 - raising fears over the impact on the world economy https://t.co/OWFIRQvDgY | Saudi oil attacks push prices up by highest amount since 1988 - raising fears over the impact on the world economy https://t.co/OWFIRQvDgY |
| Brent crude is pushing higher.... now up 11.5% today at $67.03 per barrel. | Brent crude is pushing higher.... now up 11.5% today at $67.03 per barrel. |
| Fiona Cincotta, senior market analyst at City Index, says traders are focusing on how quickly supply can return to normal at the Saudi Aramco plant. | Fiona Cincotta, senior market analyst at City Index, says traders are focusing on how quickly supply can return to normal at the Saudi Aramco plant. |
| Geopolitical risk in the Middle East is nothing new. However, what we are seeing is a physical disruption to supply, as the attacks over the weekend cut half the county’s oil production. This equates to a disruption on as much as 5% of global oil production. | Geopolitical risk in the Middle East is nothing new. However, what we are seeing is a physical disruption to supply, as the attacks over the weekend cut half the county’s oil production. This equates to a disruption on as much as 5% of global oil production. |
| We can expect oil prices to remain elevated whilst production is disrupted, some reports suggest that this could be weeks. As supply returns, we can expect the price of oil to start declining back towards $62, should geopolitical risks ease as well. However, with the US “locked and loaded” awaiting signs from Saudi Arabia that Iran was involved, tensions in the middle east could get worse before they get better. Under these circumstances the price of oil could remain elevated for some time yet. | We can expect oil prices to remain elevated whilst production is disrupted, some reports suggest that this could be weeks. As supply returns, we can expect the price of oil to start declining back towards $62, should geopolitical risks ease as well. However, with the US “locked and loaded” awaiting signs from Saudi Arabia that Iran was involved, tensions in the middle east could get worse before they get better. Under these circumstances the price of oil could remain elevated for some time yet. |
| Data provider Refinitiv has spotted that Saudi Arabia has been scrambling supertankers to export oil, to cover the shortfall from the Abqaiq attacks. | Data provider Refinitiv has spotted that Saudi Arabia has been scrambling supertankers to export oil, to cover the shortfall from the Abqaiq attacks. |
| It says: | It says: |
| Tracking data shows at least 8 VLCC’s [very large crude carriers] that are currently loading in Juaymah and Ras Tanura, with another VLCC heading to berth at one of the Juaymah SBM offshore mooring systems | Tracking data shows at least 8 VLCC’s [very large crude carriers] that are currently loading in Juaymah and Ras Tanura, with another VLCC heading to berth at one of the Juaymah SBM offshore mooring systems |
| Refinitiv ship tracking data showing at least 11 ships currently waiting to load from Ras Tanura / Juaymah as disruption has resulted in a pile up of VLCCs | Refinitiv ship tracking data showing at least 11 ships currently waiting to load from Ras Tanura / Juaymah as disruption has resulted in a pile up of VLCCs |
| Saudi Arabia needing to draw out of reserves to meet commitments but low stocks will add to pressure | Saudi Arabia needing to draw out of reserves to meet commitments but low stocks will add to pressure |
| A reminder: here’s our latest news story on the Saudi attacks: | A reminder: here’s our latest news story on the Saudi attacks: |
| Saudi Arabia oil attack: Trump hints at action as US points finger at Iran | Saudi Arabia oil attack: Trump hints at action as US points finger at Iran |
| US diplomat Richard Haass, who chairs the Council on Foreign Relations think tank, has tweeted about the Saudi attacks: | US diplomat Richard Haass, who chairs the Council on Foreign Relations think tank, has tweeted about the Saudi attacks: |
| We not only have the fog of war in the Middle East as to the attacks on Saudi oil, but also the fog of foreign policy when it comes to the United States. Potus accuses Iran w/o clear evidence, denies readiness for Iran talks w/o preconditions, and still has no clear aims re Iran | We not only have the fog of war in the Middle East as to the attacks on Saudi oil, but also the fog of foreign policy when it comes to the United States. Potus accuses Iran w/o clear evidence, denies readiness for Iran talks w/o preconditions, and still has no clear aims re Iran |
| to be sure, oil prices spiking in wake of attack on Saudi facilities. but bigger story is relative modesty of impact on oil/stock markets. attack would have had far bigger impact a decade ago, but Permian Basin, strategic reserves, slower growth have added meaningful cushion. | to be sure, oil prices spiking in wake of attack on Saudi facilities. but bigger story is relative modesty of impact on oil/stock markets. attack would have had far bigger impact a decade ago, but Permian Basin, strategic reserves, slower growth have added meaningful cushion. |
| Over in New York, shares in oil companies have jumped, but airlines are sliding. | Over in New York, shares in oil companies have jumped, but airlines are sliding. |
| Exxon Mobile (+1.4%) and Chevron (+1.3%) are leading the risers on the Dow Jones industrial average. | Exxon Mobile (+1.4%) and Chevron (+1.3%) are leading the risers on the Dow Jones industrial average. |
| Shale oil producers are also rallying: | Shale oil producers are also rallying: |
| Shares of U.S. shale producers now surging.https://t.co/qEIDGJvgSY by @racheladhe & @tina_davis pic.twitter.com/cUyCuMI604 | Shares of U.S. shale producers now surging.https://t.co/qEIDGJvgSY by @racheladhe & @tina_davis pic.twitter.com/cUyCuMI604 |
| American Airlines is dragging the market down though, down 5%, with Delta Air down 2.7%. | American Airlines is dragging the market down though, down 5%, with Delta Air down 2.7%. |
| Big-name consumer stocks including American Express (-1.8%), Procter & Gamble (-1.6%) and Walt Disney (-1.2%) are also under pressure. | Big-name consumer stocks including American Express (-1.8%), Procter & Gamble (-1.6%) and Walt Disney (-1.2%) are also under pressure. |
| UK ambassador to UN Karen Pierce says Armaco attack "is a violation of international law, as well as being dangerous and provocative". UK "still assessing what happened and who was responsible for the attacks." Adds hopes for international united response. | UK ambassador to UN Karen Pierce says Armaco attack "is a violation of international law, as well as being dangerous and provocative". UK "still assessing what happened and who was responsible for the attacks." Adds hopes for international united response. |
| At over $66 per barrel, up 10% today, Brent crude is on track for its biggest one-day surge since the Gulf War in January 1991. | At over $66 per barrel, up 10% today, Brent crude is on track for its biggest one-day surge since the Gulf War in January 1991. |
| The FT’s Adam Samson has dug into the archives.... | The FT’s Adam Samson has dug into the archives.... |
| The last time oil spiked as much as it did overnight was on January 14, 1991, during the first Gulf War. The @FT ran a story on the front page saying the surge came as "traders became convinced that a conflict in the Gulf was now virtually unavoidable". Take a look -> pic.twitter.com/RrC4AyrukW | The last time oil spiked as much as it did overnight was on January 14, 1991, during the first Gulf War. The @FT ran a story on the front page saying the surge came as "traders became convinced that a conflict in the Gulf was now virtually unavoidable". Take a look -> pic.twitter.com/RrC4AyrukW |
| Here's a closer look at the story -> pic.twitter.com/0jlPFhcxiq | Here's a closer look at the story -> pic.twitter.com/0jlPFhcxiq |
| Here’s Reuters take on the latest news from Saudi Arabia: | Here’s Reuters take on the latest news from Saudi Arabia: |
| The Saudi-led military coalition battling Yemen’s Houthi movement said on Monday that the attack on Saudi oil plants was carried out by Iranian weapons and did not originate from Yemen according to preliminary findings. | The Saudi-led military coalition battling Yemen’s Houthi movement said on Monday that the attack on Saudi oil plants was carried out by Iranian weapons and did not originate from Yemen according to preliminary findings. |
| Coalition spokesman Colonel Turki al-Malki told a press conference in Riyadh that an investigation into Saturday’s strikes, which had been claimed by the Houthi group, was still ongoing and authorities were trying to ascertain the launch location. | Coalition spokesman Colonel Turki al-Malki told a press conference in Riyadh that an investigation into Saturday’s strikes, which had been claimed by the Houthi group, was still ongoing and authorities were trying to ascertain the launch location. |
| The conflict in Yemen has been raging since 2015, with a terrible death toll. Figures released in June showed that almost 100,000 people have been killed, including thousands through the deliberate targeting of civilians. | The conflict in Yemen has been raging since 2015, with a terrible death toll. Figures released in June showed that almost 100,000 people have been killed, including thousands through the deliberate targeting of civilians. |
| Human cost of Yemen war laid bare as the death toll nears 100,000 | Human cost of Yemen war laid bare as the death toll nears 100,000 |
| Last year, charities warned that millions of children are at risk of starvation: | Last year, charities warned that millions of children are at risk of starvation: |
| The famine facing Yemen is a war crime – it must be investigated | Emily Thornberry | The famine facing Yemen is a war crime – it must be investigated | Emily Thornberry |
| #BREAKING Weapons used in Saudi attacks 'came from Iran': coalition pic.twitter.com/mMQEtUda2M | #BREAKING Weapons used in Saudi attacks 'came from Iran': coalition pic.twitter.com/mMQEtUda2M |
| The Saudi-led coalition fighting in Yemen is giving a news conference now, and claimed that they have evidence that Iran is behind Saturday’s attacks. | The Saudi-led coalition fighting in Yemen is giving a news conference now, and claimed that they have evidence that Iran is behind Saturday’s attacks. |
| It’s being streamed here: | It’s being streamed here: |
| No translation, I’m afraid, but coalition spokesman Colonel Turki al-Malki has said that | No translation, I’m afraid, but coalition spokesman Colonel Turki al-Malki has said that |
| The coalition has the capacity to defend “vital installations” | The coalition has the capacity to defend “vital installations” |
| Investigations into the attacks on Saudi oil facilities are “ongoing” | Investigations into the attacks on Saudi oil facilities are “ongoing” |
| Initial indications are that the attack didn’t come from Yemen... | Initial indications are that the attack didn’t come from Yemen... |
| ...and that the weapons used are Iranian | ...and that the weapons used are Iranian |
| The coalition is now studying the place where the attacks came from. | The coalition is now studying the place where the attacks came from. |