Oil drops as Saudis rush to fix bomb sites

OIL prices fell by more than 6pc yesterday amid reports that two Saudi facilities hit by missile strikes at the weekend could be fully operational sooner than anticipated.

The drone attacks on Saturday knocked out production of 5.7m barrels a day – around 5pc of global oil production.

Concerns that the world’s biggest crude processing facility at Abqaiq and Saudi’s second-largest oil field Khurais could be crippled for weeks or even months caused panic on the markets.

When markets reopened on Monday, the price of oil registered its biggest intra-day jump since the first Gulf War three decades ago, rising almost 20pc to just under $72 a barrel.

But yesterday senior Saudi officials claimed the facilities, which account for around half its oil production, would be running at maximum capacity within two to three weeks. They also said that the kingdom is already close to restoring 70pc of the production capability lost during the attacks.

Both sites are owned by Saudi state-backed oil giant Aramco, which produces almost as much oil as Shell, Exxon, Total and Chevron put together.

The Saudi assurances had an immediate impact, as Brent crude dropped to around $65 a barrel.

But analysts warned the market will remain highly volatile amid fears that President Donald Trump could retaliate against Iran, which the US believes was behind the drone strikes.

Fiona Cincotta, at broker City Index, said: ‘Oil is experiencing heightened levels of volatility and we don’t expect this to end soon. Traders will remain fixated on recovery time for the production facility, but also on what Trump will do next.

‘Any indication that Trump could retaliate against Iran could send oil prices higher once again.’