It would appear we have an addendum to last week’s post. As you have most likely heard by now, Saturday morning saw an attack on facilities at Saudi Arabia’s Aramco. The jury seems to be out on whether it was drones, missiles, or both, and with whom to rest the blame. According to the International Energy Agency, these attacks caused the most significant disruption in crude production in history. More than half of Saudi Arabia’s daily exports have been shut down; that is nearly 5% of the world’s oil supply.
Yet Another IPO Delay
No surprise that it is rumored the Aramco IPO may again be delayed. As of Saturday, any doubts foreign investors may have had about the volatility of the global market and Aramco’s value were surely made worse. Brent crude prices settled Monday up $6 at $66.28, the single largest jump since the 1980s. All of this leaves Saudi Arabia’s brand new Energy Minister in a tough position. What he does next could spell disaster for not his country’s diversification plan, but also any international support during possible future attacks.
Should We Worry Here at Home?
But what, if anything, does this mean for the United States? Gas prices are expected to rise a little, but companies are being encouraged not to spike prices simply out of panic. Because, really, here at home, there is no reason to panic. Monday morning, President Trump tweeted: “Because we have done so well with Energy over the last few years (thank you, Mr. President!), we are a net Energy Exporter, & now the Number One Energy Producer in the World. We don’t need Middle Eastern Oil & Gas, & in fact have very few tankers there, but will help our Allies!” President Trump, as a further precaution against panic price spikes, has also authorized the release of an undisclosed amount of the U.S. Strategic Petroleum Reserve if needed to keep supply steady.
It is unlikely to be needed, however. Thank you, Texas shale boom – because of you the United States passed Saudi Arabia in net oil exports earlier this year. They scaled back exports in an effort to boost prices, and the United States increased exports. Saudi Arabia returned to number one in July and August, but I think we made our point. Not to mention, the U.S. has consistently been a net exporter of natural gas since 2017. America is a strong, independent player, and we mean to keep it that way.
[…] such as oil and gas, and shale – which is getting more attention recently in light of the attacks on key oil facilities in Saudi Arabia and oil production continuing to hit new […]