Express & Star

Attack could spark rise in fuel prices

Petrol and diesel prices could rise by as much as 22p a gallon – or 5p a litre – as a result of the attack on the world's largest oil plant in Saudi Arabia.

Published
The damage caused by the weekend attack on the oil plant in Abqaiq, Saudi Arabia

The International Energy Agency said the disruption to the world oil supply caused by Saturday's attack on the Aramco oil factory in Abqaiq was the biggest on record, resulting in a five per cent loss in world oil production.

And the implications could be severe for the West Midlands haulage industry.

Ellis Blackham, of Dudley-based JJX Logistics, said it would have an impact on the business.

"It will have a detrimental impact," he said.

"I'm still looking at the options with the different fuel providers.

"The world will go on, and the show must go on, but as a company that spends thousands of pounds a week on fuel, it is detrimental."

Gary Penton, of Pentons Hauliers in Oswestry, said his business was fortunate in that most of its contracts allowed it to pass on any fuel price increases to customers.

But he said other operators might be in a more difficult situation.

"We get used to it really," said Mr Penton.

"It's something we have to live with. We can create about it, but there's nothing we can do."

The state-run oil Saudi Aramco oil company said the strikes would lead to a drop in output of 5.7million barrels per day, or more than five per cent of global crude supply.

The suspected drone attack caused a bigger shock to the world oil supply than the Iranian Revolution of 1979, the 1990 Iraqi invasion of Kuwait, and the 1973 Arab-Israeli war, which led to an oil embargo and petrol rationing in the UK.

The US has accused the Iranian government of being behind the attack, raising concerns of an all-out regional war in the Middle East.

The Iranian-backed Houthi rebels in Yemen have claimed responsibility for the attack.

Andrew Lipow, of consultants Lipow Oil Associates, predicted a 5p rise per litre of petrol.

Saul Kavonic, an energy analyst at Credit Suisse Group, said: “We have never seen a supply disruption and price response like this in the oil market.

“Political risk premium are now back on the oil market agenda," he said.

The Brent crude oil price rose from $54.85 a barrel on Friday, to $62.90 on Monday, before falling back slightly to $62.10 yesterday.