A drone attack on a large Saudi Arabian oil facility over the weekend has disrupted roughly 5% of global oil supply.
The oil price spiked 20% at Monday’s opening, the biggest rise since futures began trading in 1988, before relinquishing half of that surge. Saudi Arabia is racing to get supply back on track, but the attack reveals some vulnerability which will be reflected in the traded price of oil. The economic impact could be limited if Saudi Arabia succeeds in engineering a swift restoration of oil output. However, a temporary oil price shock could still derail the global economy, which is showing marginal signs of improvement.
