How the shock of the Saudi attack will linger over the oil market

The drone strike on Saudi oil facilities proves that the global oil supply chain is vulnerable to attack. Markets must start to price a bigger risk premium into oil.

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The attack on Saudi Arabia's oil facilities was "the big one", says Spencer Jakab in The Wall Street Journal. The drone strikes on the world's largest oil processing plant at Abqaiq has forced Saudi Arabia to cut output of of crude oil by 5.7 million barrels per day (mbpd), roughly 60% of its output and as much as 6% of global supply. World oil production is around 100 mbpd. Even if supplies are restored quickly, as Saudi Arabia has reportedly indicated they will be, the "technological sophistication and audacity" of this strike against critical infrastructure, for which Iran-backed Houthi fighters in Yemen have claimed responsibility, "will linger over the energy market".

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.