As expected oil price surged when markets opened on Monday, following the twin-attack on oil facilities in Saudi Arabia on Saturday.

The attacks, which allegedly crippled Saudi production capacity by half, have understandably caused jitters in global markets. Brent futures surged $12 per barrel, a jump of 20 percent, in the first few minutes of business on Monday, while WTI climbed more than $8 per barrel, or about 15 percent. Both prices fell by half, a short while later.

Industry analysts believe that a prolonged high-price scenario is unlikely in the present situation given the weak global demand for oil. Sustained high prices could evaporate whatever marginal demand still remains in the markets. So traders are wary of hiking prices too high or for too long.

What so-called experts who tend to panic at the slightest pretext do not realize, and wily speculators who stand to gain from price fluctuations will not disclose, is that there is a huge difference between Saudi production and Saudi exports of oil.

According to the latest available figures from the Organization of Petroleum Exporting Countries (OPEC), and based on its Annual Statistical Bulletin 2019, Saudi production was 10.3 million barrels per day, while exports were 7.4 million barrels per day. Nearly 3 million barrels are moved each day into the country’s strategic reserves.

As per a statement from Aramco, the state-owned mega oil company which operates the damaged facilities, the attacks have cut Saudi production to 5.6 million barrels per day. From just adding the figures together it is clear that Saudi’s rump production of 5.6 million plus dipping into the earlier daily stock reserves of 3 million, would more than cover Saudi Arabia’s current export commitments of 7.4 million barrels per day.

The only way the whole scenario could deteriorate further, and cause prices to really soar, is if US President decides to attack Iranian oil facilities in retaliation for its alleged role in the Saudi fires. An attack on Iranian oil or nuclear facilities could soon spiral out of control and send oil prices way up. The only ones who would rub their hands in glee at this prospect would be oil producers in the US. But it helps to remember that a global economy that is barely limping along cannot afford yet another hurdle in its path; it could very well stumble and pull everyone — oil producers and non-oil producers — down as well.

The only silver lining to this gloomy scenario is that notwithstanding his threat to Iran of the US being ‘locked and loaded’, the US leader would probably restrain himself under wiser counsel. Last month, he made a similar “locked and loaded” threat against North Korea, only to turnaround and praise the “great and beautiful” vision of North Korean leader Kim Jong-un. Threats by the US President, who is known more for shooting-from-the lip rather than the hip, will hopefully be ignored by Iran.

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