SINGAPORE (Sept 23): In a few fiery moments, the drone strikes on Saudi Aramco’s main facility at Abqaiq cut 5% off the global oil supply. Oil prices surged as much as 20% when the markets reopened as analysts scrambled to make sense of the impact. The IPO of state-owned oil company Saudi Aramco, already delayed multiple times, seemed likely to be pushed back again, amid major damage to its operations, which accounted for half of the kingdom’s oil production. Iran, or elements backed by it, has been blamed as the likely perpetrator, giving rise to fears that a US-led retaliation might ensue.
But, even as the Saudis fought to get the facility and its oil supply back online, global markets did not react quite the way it did during the two previous “oil shocks” of 1973 and 1979.
That markets did not go into panic mode, nor did queues start forming at petrol stations, highlights a new norm: Oil may no longer be seen as the strategic asset it once was.
