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16th Sep 2019

Oil prices surge after Saudi Arabia attack wipes out 5% of the world’s supply

Carl Kinsella

Oil prices

Donald Trump has threatened retaliation for the attack.

Petrol prices are expected to rise following a major attack that halted half of all Saudi Arabia’s oil production over the weekend.

Responsibility for the attack was claimed by Houthi rebels in Yemen, who are engaged in a civil war with the President of Yemen.

In 2018, the United Nations warned that 13 million Yemeni civilians face starvation in what it says could become “the worst famine in the world in 100 years”. The war is largely seen as a proxy war between the Saudi-backed government and the Iran-backed rebels.

The attack was carried out by drone strike.

Brent crude, the international benchmark used by oil traders, reached $71.95 a barrel at one point after the attack.

In order to mitigate the effects of the attack on oil prices, US president Donald Trump has freed up America’s oil reserves. The price of a barrel has since fallen to $65.40, which is still an increase of almost 9%.

Trump has also threatened retaliation on behalf of Saudi Arabia for the attack. Late on Sunday night, he wrote on Twitter: “Saudi Arabia oil supply was attacked.

“There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!”

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