The weekend greeted us with the grim news of drone strikes at the oil fields of Saudi Aramco, which wiped off almost 50% of Saudi Arabia’s oil output. The destroyed output notably accounts for almost 5% of total global supply, which spurred up to 20% surge in crude oil price.
It has since stabilized at around $65.50, which represents an 8.3% upside from Friday’s price. However, with the blame-game and mud-slinging raising tensions in the Middle East, market experts say the prospects of crude oil breaching even $100 mark cannot be disregarded.
Major US stocks were trading higher during pre-market hours on Monday. Oklahoma City-based exploration company Chesapeake Energy Corporation (NYSE: CHK) was the biggest gainer with the stock soaring over 15% during pre-market hours.
Occidental Petroleum Corporation (NYSE: OXY)
and Schlumberger Limited (NYSE: SLB)
were trading over 4% higher, while industry mammoths Exxon Mobil Corporation (NYSE: XOM)
and Chevron Corporation (NYSE: CVX)
were up over 3%.
Oil giants outside the US – including BP PLC and Royal Dutch Shell PLC – also made steady gains during Monday’s trading hours.
READ: How to safeguard your portfolio in a recession-driven bear market
Saudi Aramco, the state-owned oil giant, is one of the most profitable companies in the world and is expected to float a part of its stake in the US sometime later this year or next year.
In a high-profile drone strike on Saturday, Iran-backed Houthi rebels allegedly destroyed Aramco’s petroleum plants in Abqaiq and Khurais, leading to a total loss of 5.7 million BPD of oil output. Saudi Arabia and the US have come out with strong statements against the aggression.
Even as Iran has denied its hand in the attacks, Yemen-based Houthi group has claimed responsibility for the attack.
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