Motorists can expect volatility at the gas pump in the coming days and weeks following the drone attacks in Saudi Arabia over the weekend, AAA Oklahoma said.
Attacks were on two major oil facilities, including the world’s largest, Abqaiq. The attacks have taken 5.7 million (crude) barrels per day off the market, accounting for about 6% of the global supply, AAA said.
The U.S. and international benchmarks for crude each vaulted more than 14%. That’s comparable to the 14.5% spike in oil prices on Aug. 6, 1990, following Iraq’s invasion of Kuwait.
Benchmark U.S. crude oil soared $8.05 to settle at $62.90 a barrel. Brent crude oil, the international standard, jumped $8.80 to close at $69.02 a barrel.
Prior to the attacks, global crude oil supply was healthy, in fact sitting on a global glut of stock, AAA Oklahoma said.
Oklahoma motorists are paying an average of $2.28 a gallon at the pump, the eighth least expensive in the nation. This is up 3 cents from last week, ahead of the attacks.
“Americans can expect local pump prices to start to increase this week. The jump could end up being as much as a quarter per gallon throughout this month,” said AAA Oklahoma spokeswoman Leslie Gamble.
“Whether this is a short- or long-term trend will be determined by the price of crude oil prices and how quickly the facilities in Saudi Arabia can recover and get back online.”
Damage to the facilities is still being assessed, but there is no word on whether it will be days, weeks or even months before infrastructure is repaired.
To ease concerns, President Donald Trump said he authorized the release of crude from the Strategic Petroleum Reserve. Other Saudi-oil-consuming countries also have emergency reserves to help back-fill the global loss if needed.
The U.S. currently depends less on crude imports from Saudi Arabia. The latest Energy Information Administration report showed that the U.S. imported the least amount of crude oil from Saudi Arabia this decade. In the first half of this year, on average the U.S. imported about 18,000 barrels, compared to 35,600 barrels in the first half of 2017.
While U.S. gasoline stock levels have been decreasing the past few weeks, total domestic stocks sit at 228 million barrels, which is ahead of the five-year average for this time of year by several million barrels. Monday’s national gas price average is 7 cents cheaper than last month and 28 cents cheaper than this time last year.
But the gaps are likely to shrink as the market adjusts to the news and crude oil prices increase, AAA said.
The Associated Press contributed to this story.
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