Oil Up 15% Following Drone Attack On Saudi Facilities

Oil prices rose across the globe on Monday following a weekend of drone strikes which quickly cut half of Saudi Arabia’s crude production.

The attacks may end up causing slower economic growth both inside the kingdom and around the world. Riyadh is calling upon the leaders of the world to respond to drone attacks on its facilities “regardless of origin.” Tensions in the Middle East rose instantly with a series of drone attacks on state-owned Saudi oil company Aramco. The first attacks took place before dawn Saturday morning, wiping out half of Saudi Arabia’s crude output. In one decisive attack, half of the crude output of the world’s largest exporter has been wiped out, representing 5% of the entire world’s supply, or 5.7 million barrels per day. Yemen’s Houthi rebels claimed responsibility for the attack, warning that their targets “will keep expanding.” Saudi Arabia has been assisting the Yemeni government in fighting the Houthi Rebels, providing valuable air support.

Shares in major oil companies, known as the “supermajors,” climbed all over the world on the news. Schlumberger Limited was up 5%, Halliburton was up 6.6%, ExxonMobil was up more than 1.5% while Chevron was up almost 2%. BP spiked even higher at 3.2%, while companies that supply other Middle Eastern supermajors were up even higher. Halliburton and Schlumberger supply most of Aramco’s drilling equipment, so their shares rose especially high on expectations of more business following these drone attacks. On Sunday, President Donald Trump took to Twitter to state that he’s authorized the release of oil from the Strategic Petroleum Reserve in order to offset any potential interruptions to supply.

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