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Tue 24 Sep 2019 10:30 AM

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Video: Saudi drone attacks - what is the damage done?

It's been a week and there still seems to be no clarity on who launched the drone attacks on 2 Saudi oil facilities.

What’s the damage done and what will its repercussions be on the rest of the oil economies - let’s find out.

Drone attacks on key Saudi oil facilities have halved crude output from OPEC's biggest exporter.

Needless to say, the impact on oil prices were drastic - in fact, oil prices surged by the largest amount since the first Gulf War.

Brent oil prices leapt 20 percent on Monday to chalk up the biggest intra-day daily gain since 1991.

The strikes targeted Saudi Arabia's Abqaiq, the world’s largest oil processing facility and Khurais oil facilities.

Aftermath?

The attack knocked 5.7 million barrels per day off production, more than half of its total output.

Saudi Aramco’s chairman, however, said that this won’t slow preparations for an initial public offering of the state-owned oil giant.

OPEC, whose 14 member nations together pump just under one third of the world's oil, are already seeking to curb supplies and lift prices.

Oh did I not mention the obvious yet - Saudi and The US are blaming Iran for the attacks – a claim that Tehran denies.

The weekend drone attacks could boost producers with spare capacity -- yet also exposes simmering tensions between Riyadh and Tehran.

The world's biggest oil producer on booming shale oil - the US - stands to benefit from this.

However, In order to cushion the market impact, US President Donald Trump on Sunday authorised the release of oil from US strategic reserves.

The global economy, which is suffering from a sharp slowdown amid the China-US trade war, is likely to take a hit from soaring oil prices.

Runaway oil prices meanwhile feed through into higher consumer prices and risk stagflation, whereby they suppress growth yet fuel inflation.

China, which remains entangled with the United States in a trade war, is also expected to suffer due to its oil-dependent and energy-hungry economy.

Saudi Aramco says full capacity should be restored by the end of September. But what if such an attack happens again?

(Source: Arabianbusiness.com YouTube channel)