Oil Price Surges After Saudi Oil Facility Drone Attack

By Uche Mbah

Crude prices surged yesterday when drones attacked the oil fields in Iraq, raising the price to an unprecedented high in recent times, surging by $11.73 to close at $71.95.

The drones had attacked world’s biggest crude-processing facility located in Abqaiq and in Khurais, the kingdom’s second-biggest oil field.

Although no group has taken responsibility for the attack, fingers are cautiously being pointed at Iran, though the United States insists the culprits are known and they are waiting for the Iraqis to make pronouncements on the issue. Iran has vehemently denied involvement.

The surge seem to be pulling the Nigerian market out of crisis, as the 2019 budget was predicated on a benchmark of $60 per barrel. The new price ceiling hovers around $72 per barrel.

Last August, it had plummeted below the benchmark, creating anxieties in an economy that in recent times has been enmeshed in scandalous borrowing trend. The bears are having a marathon run at the stock market due largely to cautious divestment of foreign investors that saw no future in a regime that international media said has no recognizable economic plan.

Government had predicated the benchmark on the surge of October last year, when the price burped up to $86.67 per barrel.

Iraq promises to restore the facility in a few days, but it will take time before the plant comes into optimum productions.

The United States are expected to release their strategic reserves to cushion the surge effects, according to twits by President Trump on the issue.

Nigeria, despite being saddled with so many resources, are laid back on the pre-millenial reliance o n crude. Unfortunately, crude accounts for about 40% of earnings. But other earners are being neglected in favor of oil. Many presidents take umbrage in manning the Petroleum ministry, where they control the Nigerian National Petroleum Corporation, NNPC, which has over the years ran an opaque accountability.