Gareth Kiernan: Petrol prices soar - and are expected to stay high


Manage episode 242155318 series 2098280
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Crude oil prices have surged more than 19 per cent after a drone strike on a Saudi Arabian oil facility wiped out about 5 per cent of global supplies.
Brent prices jumped as much as $11.73 to $71.95 a barrel in early trading in Singapore.
State energy producer Saudi Aramco lost about 5.7 million barrels per day of output on Saturday after 10 unmanned aerial vehicles struck the world's biggest crude-processing facility in Abqaiq and the kingdom's second-biggest oil field in Khurais.
For oil markets, it's the single worst sudden disruption ever, surpassing the loss of Kuwaiti and Iraqi petroleum supply in August 1990, when Saddam Hussein invaded his neighbour. It also exceeds the loss of Iranian oil output in 1979 during the Islamic Revolution, according to data from the U.S. Department of Energy.
Infometrics' Gareth Kiernan told Kate Hawkesby that jump equates to about 15 cents more a litre at the petrol pump.
"If you get up to $100 a barrel, which seems to be the top end of what people are talking about, you are talking about $2.80 a litre for 91."
He says the rise in petrol prices may hang around, even after the facilities are back up and running.
"And I don't think that sort of risk has been priced into oil prices previously. What we might see is some sort of permanent lift in oil prices compared to what we have had."
Yemen's Iran-aligned Houthi group claimed responsibility for the attacks, but US Secretary of State Mike Pompeo says Iran is to blame.
Iran's Foreign Minister Javad Zarif has accused the US of "deceit" and says blaming Iran "won't end the disaster in Yemen".

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