The drone attack at Saudi Arabia’s oil fields as well as a major production unit on Saturday could imply that drivers will have to pay around 25 cents more for each gallon in short run. Moreover, the economists believe that more tensions in the country may lead to an additional sustained increase in the oil prices.
The attacks carried out by Iran-supported Yemenis cut down export of the kingdom in half, a sum which comprises over 5% of the globe’s oil supply. Brent, the international oil benchmark increased by almost 20% while West Texas Intermediate (WTI) jumped by over 15%. However, the two metrics lowered slightly to an almost 10% high each by Monday.
On the other hand, the American drivers now can expect shelling out around 10-25 cents more a gallon in the coming days, estimated the analysts. The biggest factor here is the amount of time the Saudi Arabian national petroleum company, Saudi Aramco would take to repair the facility and get it functional. According to CNBC, the aim was to have around 1/3rd of production restored by Monday.
While analysts said that the attacks are not likely to provoke recession, they categorized them as a plausible daunting headwind.