This is the kind of thing that we should really worry about :
An explosion and shots have been heard at a major oil refinery at Abqaiq in eastern Saudi Arabia, reports say.”
About two-thirds of Saudi Arabia’s oil is processed at the Abqaiq refinery, one of the largest in the world.
Oil security analysts have estimated that a serious attack on the Abqaiq facility could halve Saudi exports for up to a year.
Saudi production last year was 9.5 million barrels per day….
A major, successful, attack on that refinery would thus cut production to 4.25 million barrels.
Current world oil production is 89 mbpd
Consumption is 86mbpd
That means… one large attack.. on one large refinery, would cause a shortfall of production of around 1 million barrels per day.
We don’t have much wiggle room.
Were an attack of this sort successful, we’d likely have some “demand destruction” and inevitably higher prices to deal with.
The price of crude on the New York went up this morning on the news and is currently trading at around $62.55 up $2.