Yahoo News Oil share price: Saudi Arabia drone attack causes biggest shock to prices since first Gulf War
The value of oil has surged after an attack on Saudi Arabian refineries cut off supplies, in the biggest shock to prices since the first Gulf War.
The price of oil leapt almost $12 (£9.63) a barrel in the seconds after the London stock exchange opened, Bloomberg reported.
This is the most in dollar terms since Brent futures - a major trading classification of sweet light crude oil that serves as a benchmark price for purchases of oil worldwide - were launched in 1988.
Brent crude oil hit $71.95 (£57.77) for the first time since May, and is currently changing hands at $66.63 (£53.50) per barrel after being traded from just $60 (£48.17) on Friday night.
Prices have now pulled back to about half of the initial surge of almost 20 per cent but are still heading for the biggest advance in more than three years.
Energy analyst at Credit Suisse Group AG, Saul Kavonic, told Bloomberg: "We have never seen a supply disruption and price response like this in the oil market.
“Political risk premium are now back on the oil market agenda.”
It comes after Yemen's Iran-aligned Houthi group claimed responsibility for attacks on two refineries on Saturday.
A source close to the matter said the attack has affected five million barrels per day of oil production - almost half the kingdom's current output.
The attack on the world's biggest oil exporter has affected around 5 per cent of the world's oil production.
Donald Trump tried to calm the oil market on Sunday by opening the taps on America's stock of crude oil.
Saudi Arabia oil supply was attacked. There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!
— Donald J. Trump (@realDonaldTrump)
He tweeted: "Based on the attack on Saudi Arabia, which may have an impact on oil prices, I have authorised the release of oil from the Strategic Petroleum Reserve, if needed, in a to-be-determined amount sufficient to keep the markets well-supplied.
"I have also informed all appropriate agencies to expedite approvals of the oil pipelines currently in the permitting process in Texas and various other States."
But the President also claimed America is "locked and loaded" to retaliate if it is proved Iran is behind the drone attack.
He added: "Saudi Arabia oil supply was attacked. There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!"
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Trump: US is 'locked and loaded' if Iran is behind Saudi oil attacks
Fears of conflict in the Middle East is gripping markets this morning as it is the single worst sudden disruption ever.
It even surpasses the loss of Kuwaiti and Iraqi petroleum supply in August 1990, when Saddam Hussein invaded his neighbour, Bloomberg reports.
The cost of fuel and heating will increase, lifting inflation and potentially weakening the global economy.
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Read more Trump: US is 'locked and loaded' if Iran is behind Saudi oil attacks
