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An attack over the weekend which destroyed many key oil facilities in Saudi Arabiahas “caused the worst disruption to world supplies on record,” reports CityNews.
The attack stopped the production of 5.7 million barrels of crude oil being produced per day, over half of Saudi Arabia’s global daily exports, and set the world back by 5 percent of daily crude production.
Following the attack, Benchmark Brent crude prices went up nearly 20 percent on Monday, before falling to roughly 10 percent, and a “barrel of Brent traded up $6.45 to $66.67.”
However, both the U.S. and Canada seem to be weathering the momentary oil shortage well. President Donald Trump quickly took to Twitter to reassure his nation that there is plenty of oil in reserves.
Furthermore, experts in Canada say they were prepared for such a shortage, adding that a lack of oil in other countries could be a good opportunity for Canadian oil companies to fill the gaps.
“Our view was that Canadian oil and gas companies were inexpensively priced before. What we’re seeing now is a movement in the oil price, not just at the front end of the curve but also really out through calendar ’20 and ’21, which really just means we’re seeing a bit of risk premium creep into the oil price,” said Randy Ollenberger, managing director of oil and gas equity research at BMO Capital Markets.
EnPro’s Roger McKnight says that gas prices may go up by three to four percent by Wednesday. However, he added that Canadians are fortunate that many retailers recently switched to the winter blend of gasoline, which is cheaper to produce. Thus, it is likely the rise in prices will be temporary.