US President Donald Trump has authorised the use of the nation's emergency oil reserve to help fill a potential supply gap after major Saudi Arabian facilities in Khurais and Abqaiq were hit by a drone attack, temporarily halving the nation's production.
Based on the attack on Saudi Arabia, which may have an impact on oil prices, I have authorized the release of oil from the Strategic Petroleum Reserve, if needed, in a to-be-determined amount....— Donald J. Trump (@realDonaldTrump) September 15, 2019
....sufficient to keep the markets well-supplied. I have also informed all appropriate agencies to expedite approvals of the oil pipelines currently in the permitting process in Texas and various other States.— Donald J. Trump (@realDonaldTrump) September 15, 2019
The US Strategic Petroleum Reserve holds approximately 645mn barrels of crude in a complex comprising four sites in the US. It has only been used three times since it was created in 1975.
The attacks, and news that Saudi production would be halved, removing 5.7mn barrels per day, or 5% of global supply, off the market, saw oil prices rocket, with Brent crude futures trading at almost $68 per barrel.
Analysts have differing views on the impact this will have on the oil price in the longer term, with some saying $100 oil could be on the horizon.
The attacks come as Saudi Aramco pushes towards an initial public offering, and analysts say that while the attacks would not have a large impact on a local listing, the company's valuation could be significantly lowered due to these risk factors.