CAPE TOWN – Chances of a cut in petrol prices next month have likely been dashed by the record rise in world oil prices early yesterday morning, after Saturday’s strike by ten drones on Saudi Arabia’s second biggest oil refinery knocked out 5 percent of the world’s oil supply.
But the Brent crude oil price - a benchmark in the government’s determination of local fuel prices, saw a record initial surge of almost 20 percent to above $71 a barrel, within minutes yesterday morning. The price fell slightly, later, but an analyst warned the attack could signal higher oil prices over the longer term, as a risk premium would need to be built in oil from Saudi Arabia, once considered one of the most consistent suppliers of crude oil.
He said the AA was going to publish a forecast yesterday, but had postponed it until today to obtain a better picture following the attack. “The implications of these attacks are far-reaching and lasting, going well beyond the immediate disruption to albeit a very large portion of global output. It is a material escalation in the risks to supply. Traders now worry Saudi Arabian oil production can be swiftly and easily knocked out, which goes against everything we’ve come to expect for the last 50 years,” said Wilson.