Global oil prices surged today after attacks on a Saudi Arabian key oil facility cut its production by half, pulling 5 per cent of the world’s oil supply off the market.
Oil giant Saudi Aramco lost 5.7 million barrels per day of output after unmanned aerial vehicles struck the world’s biggest crude-processing facility in Abqaiq over the weekend, Bloomberg reported.
Also read: Australia in talks with US over oil supply
While the damage is extensive, Bloomberg reported Saudi Arabia is likely to restore almost half the oil production lost, but it could take weeks.
Will the oil strikes affect Aussie petrol prices?
Energy Minister Angus Taylor told the ABC he didn’t believe the drone attacks in Saudi Arabia would drive up domestic petrol prices.
"It's clear that there's no immediate threat to our supplies," he said. "There are ample commercial stocks globally, and that's the key to making sure that this is as manageable as possible and that the impact is minimised."
But shadow minister Jim Chalmers thought otherwise, labelling the air strikes “incredibly concerning”, according to AAP.
"When you consider that alongside other issues in the Strait of Hormuz, other issues in the global economy, those issues are concerning," Chalmers told reporters in Canberra.
CommSec chief economist Craig James told the ABC that domestic fuel prices were likely to rise in response to the hike in oil prices.
"Every US dollar per barrel increase in the price of oil is basically a cent at the Australian petrol bowser," he said.
James said Aussies would have a few weeks grace before price hikes kicked in.
"It takes around about two to three weeks for the [oil] price to come through to the bowser price."
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