It is feared the explosions may have knocked out half of the Saudi kingdom's oil output. Photo / AP
It is feared the explosions may have knocked out half of the Saudi kingdom's oil output. Photo / AP
Motorists could be paying high petrol prices within days after Saturday's drone attacks on Saudi Arabia's oil facilities by Iranian-backed Yemini rebels.
"It's not a good sign," Automobile Association spokesman Mark Stockdale said.
"It remains to be seen what impact it will have, how markets respond. But certainly a reductionin the supply in oil could have a negative impact on commodity prices, which could result in higher prices at the pump."
In what's been labelled the most serious attack on Saudi Arabia's oil infrastructure in decades, the explosions may have knocked out half of the kingdom's oil output for days or more.
Stockdale said the oil market had been very stable beforehand, despite other geopolitical issues threatening to push commodity prices higher.
"Fearing the worst, I expect that the market will open up US$5 to US$10 per barrel on Sunday evening."
Brent crude, the global price benchmark, closed at US$60.22 per barrel on Friday.
Michael Kern, an analyst for oilprice.com, suggested in a worst-case scenario barrels could increase to US$100.
It is feared the explosions may have knocked out half of the Saudi kingdom's oil output. Photo / AP
"While Aramco is confident that it can recover quickly, if it can't, however, the world could face a production shortage — an outcome which could send oil prices into the triple-digits."
Economist Cameron Bagrie told Newshub New Zealand would likely feel the impact.
"It's a little bit like having the All Blacks play with 13 or 14 players, or taking Steve Smith out of the Australian cricket team — this is a major facility."
BP spokesman Gordon Gillan said the attacks could mean higher prices at the fuel pump.
"Our prices are reflective of the barrel price, on international markets and other influencing factors, so it's possible there could be an impact on local prices later this week. But we wouldn't want to speculate."
Asked whether any change to global oil prices would necessarily mean an immediate increase in petrol prices here, he said: "We review our BP Connect prices everyday so our prices are as competitive as possible.
"It could change tomorrow, it could be the next day."
Meanwhile, jet fuel prices will go up if there is any increase in the cost of crude oil and this could lead to fare rises.
Fuel makes up at least 25 per cent of airlines' operating costs and jet fuel is now at US$77 a barrel, nearing the top of the range for carriers to hold prices. Airlines will cut capacity if fuel prices rise steeply and this too can lead to fare increases.
This year, Air New Zealand expects to spend $1.3 billion on fuel, based on an average jet fuel price of US$75 a barrel.
A Government spokesman said there would be no comment on the drone strikes in Saudi Arabia until today.
