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What triggered the rise in oil prices

30 September 2019

What triggered the rise in oil prices

A couple of weeks ago there was a series of attacks on oil infrastructure in Saudi Arabia. One of the biggest oil-producing plants in the world was partially destroyed. The event provoked a rise in oil prices. At the moment the price is trading at about 71 USD per barrel. In the history recorded that this is the biggest rise in the price of oil for all time.

 

The consequences of the attack was postponed a significant imprint on the world community. Given the fact that stock exchanges are in a state of instability, oil prices increase. We remind you that oil production in Saudi Arabia fell in two times, the performance is about 5.7 million barrels per day, the losses are considerable. Despite the fact that the US government blames Tehran, the Iranian authorities deny any involvement in the attack.

 

This Monday the price of oil rebounded decently. In the first seconds of the start of trading on the London stock exchange, the price has risen by 12% (meaning the price of Brent crude). Such a rapid rise in the London stock exchange has seen since 1988. A few hours later, the price dropped by 20%, having played a good half of the morning jump.

 

Financial markets are on the rise. Starts increase the demand for such valuable assets as US treasuries, gold, yen and other raw materials. Experts say that the demand has raised fears about the continuation of the geopolitical conflicts that are the consequences of the attacks in Saudi Arabia.

 

Hereditary Prince of Saudi Arabia Mohammed bin Salman commented on the situation. He emphasized that the world community must unite in order to curb and regulate the criminal actions of Iran. If there is a number of conflict situations - it will lead to “unimaginable high values of oil prices,” said Mohammed bin Salman.

 

Despite the fact that the military conflict is gaining momentum, Salman said that he would like to settle differences through political means. “If the world does not take decisive action to deter Iran, we will see a further escalation that would threaten global interests. Oil supplies will be disrupted and the price of black gold will jump up to incredibly high values, which we have not seen in life” - said the Prince.