The drone attacks on an oil processing facility and an oil field in Saudi Arabia on Saturday knocked out about half of Saudi Arabia’s daily crude production, the BBC reports. The impact of those missing 5.7 million barrels of daily crude production is already being seen and felt across the world as oil prices soared in the face of the disruption to the global oil supply.
While oil prices climbed (CNN reports that, in the U.S., it is up 9.8% to more than $60 a barrel, and international oil rose 10.4% to $66.47 a barrel), some stocks fell as investors got nervous about the economic impact. The Dow Jones slid 70 points, or 0.3%, after briefly falling more than 100 points. One industry that was particularly hard hit was airlines, whose stocks fell off a cliff when the markets opened. Delta, JetBlue Airways, and United Airlines were all down at least 3%, while American Airlines dropped 6.5%, according to CNBC.
Saudi officials have said that it expects to get to about one-third of normal oil output by Monday, but experts say it could take weeks for the facilities to return to full capacity, per the Wall Street Journal. If you remember back to Economics 101, lower supply leads to higher prices. Consistently, higher crude oil prices could lead to rising fuel prices, which are usually passed along to consumers in the form of higher prices at the pump and increased ticket prices in the air.
Although President Trump has said he authorized the release of oil from the U.S. strategic petroleum reserve to keep the market well supplied and prices stable, stock traders and experts don’t seem to believe it will be enough to keep fuel prices down and air ticket prices low enough for consumers to finally take that vacation.