The 14th of September attacks: another oil chock?

3rd October 2019
-News, IAM

Hugues Chevalier, Economist

The 14th of September attacks on two major oil infrastructures in Saudi Arabia have cut global oil supply by 5.7 million of barrels per day or 5.5% of the total. Oil prices have jumped by 20% on the same day at 71 dollars per barrel for the Brent, before coming back at 65 dollars today. This is a price increase of around 15%, meanwhile the Wahhabi Kingdom has announced it has already restored 70% of the supply. Since the current economic situation is already gloomy, as the latest PMIs indicators for September show, an increase of more than 10% of the oil price will definitely impact even more the global growth, which is already affected by factors such as the trade war between the US and China, Brexit, Hong Kong troubles, etc. Yet, the most affected sectors by oil prices, such as airlines, see numerous recent insolvencies (Thomas Cook, etc.).