Today’s Energy Update
(Because Energy Fuels Our Lives)
Crude oil prices closed today up about 15%. They escalated throughout the day as it became increasingly obvious that the production outages in Saudi Arabia will likely continue for weeks, and as rhetoric between the U.S., Iran and Saudi continued to become more heated. How many weeks the Saudi outages will last is anyone’s guess.
You should expect prices to continue to rise until – and if – the situation calms down and we have hard information indicating Saudi production is being restored.
In case you missed my story at Forbes.com linked and excerpted below, this is the largest sudden outage of crude production in world history, even larger than the Arab Oil embargoes of the 1970s.
It’s a big deal.
Here are a dozen things everyone should know about the past weekend’s strikes on a major Saudi oil refinery, and the likely fallout from them:
- The Houthis, a rebel army fighting against Saudi-led interests in Yemen, claimed credit for launching the attacks on Saturday. However, the U.S. government now says it believes the assault was launched from Iran, and that it may have involved cruise missiles rather than drones.
- The strikes centered on Saudi Arabia’s Abqaiq refinery. Abqaiq is the world’s largest oil refinery, processing about two-thirds of the total Saudi supply each day. Saudi Arabia is the world’s second-largest producer of crude oil behind the United States.
- Several large Saudi oil fields were also attacked. Those attacks, along with the disruption of the Abqaiq refinery required the Saudi government to shut-in about half of its current production, or about 5.7 million barrels of oil per day.
- According to the U.S. Energy Information Administration (EIA), that amounts to the single biggest sudden disruption on record, more than the loss of Kuwaiti and Iraqi supply during the Gulf War in August 1990, and the 1979 decrease in Iranian output following the Islamic Revolution.
That is all.
Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.