Global oil prices jump as attack on Saudi plant jolts

New York: Global energy prices spiked Monday by 15% 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.

Crude was up more than $8 per barrel by midday trading, to about $63, and Brent picked up more than $9 per barrel, to $69.

The attack on the country’s largest oil processing plant disrupted more than half of its daily exports, halting 5% of world crude oil output.

It followed a string of other attacks in the Persian 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, 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.” The Associated Press explains the far-reaching impact of the attack on the global economy.

The US and Asia’s reliance on Mideast oil Asia is the biggest consumer of Persian Gulf oil, absorbing three-quarters of the oil that travelled out of the region last year. Saudi Arabia provides about a fifth of China’s crude imports, more than 37% of Japan’s and almost a third of South Korea’s.