Oil prices surge

17 September, 2019 12:00 AM printer

HONG KONG: Oil prices saw a record surge Monday after attacks on two Saudi facilities slashed output in the world’s top exporter by half, fuelling fresh geopolitical fears as Donald Trump blamed Iran and raised the possibility of a military strike on the country.

Brent futures surged $12 in the first few minutes of business — the most in dollar terms since they were launched in 1988 and representing a jump of nearly 20 percent — while WTI jumped more than $8, or 15 percent.

Both contracts pared the gains as the day wore on but were still up nearly 10 percent, reports AFP.

The attack — claimed by Tehran-backed Huthi rebels in neighbouring Yemen, where a Saudi-led coalition is bogged down in a five-year war — hit two sites owned by state-run giant Aramco and effectively shut down six percent of the global oil supply.

Trump said Sunday the US was “locked and loaded” to respond to the attack, but was in talks with Riyadh.

And 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 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.

But The New York Times reported that US officials had satellite images showing the attacks — possibly with drones and cruise missiles — had come from the north or northwest. That indicated they were sourced in the northern Persian Gulf, Iran or Iraq, rather than Yemen.

China on Monday called for the US and Iran to “exercise restraint”.


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