LONDON – The 5 percent drop in global crude output caused by last weekend’s strikes on Saudi petroleum facilities was reflected on Monday in steep hikes in oil prices on international markets.
The price of Brent crude, the international benchmark, shot up nearly 20 percent to $71.95 a barrel, the largest increase in percentage terms since the Iraqi invasion of Kuwait in 1990.
By the end of the trading day in Europe, the price of Brent fell back to $69.02 a barrel, up 14.59 percent from last week’s close.
The US benchmark, West Texas Intermediate, climbed 14.8 percent to $62.90 a barrel to post its biggest one-day jump in more than a decade.
Seeking to calm the markets, the United States announced that President Donald Trump had given authorization in principle for the release of crude from the Strategic Petroleum Reserve (SPR) to stabilize prices, if that should prove necessary.
But US Energy Secretary Rick Perry said it was too soon to say whether Washington will need to tap its emergency oil stocks.
“I think we’re yet a little premature in making in comments on ... whether or not the SPR’s going to be needed until we get a real handle on the length of time that this facility is going to be down,” he told CNBC television.
“I think the Saudis are already saying that they’re going to be able to get a third of this production back before the closing of business today,” Perry said. “There’s going to be a spike in this, but again, I want to be really clear that the market out there has a fairly substantial amount of oil available.”
The grouping known as OPEC+, comprising the 14-member Organization of Oil Exporting Countries along with other major producers such as Russia and Kazakhstan, is not contemplating any special measures in response to the decline in output from Saudi Arabia, Moscow said on Monday.
Saudi state-owned oil giant Aramco said that it could be weeks before the damaged facilities to return to normal operation and said that the attacks had reduced its production by around 5.6 million barrels per day.
Houthi rebels in Yemen, where Saudi Arabia has been waging war since 2015, claimed responsibility for Saturday’s attacks, but US officials have blamed Iran.