Drone strikes on Saudi Arabia's Abqaiq oil refinery have wrought chaos on world oil markets and made the forecasting of the oil price more difficult. This is according to the Automobile Association (AA), which was commenting on unaudited mid-month fuel price data released by the Central Energy Fund.
"The refinery strike was a game-changer for the way oil price stability is viewed. At a single stroke, five to seven per cent of the world's oil output has been wiped from the board, leading oil prices to surge disproportionately," says the AA.
The effect of the attacks has begun to feed into the South African fuel price picture.
Diesel, already set for an increase by last Friday, has swung further into the red, with an increase of 13 cents a litre now forecast. Illuminating paraffin has followed suit, with an eight-cent rise on the cards. All grades of petrol were showing a decrease on Friday, but this has narrowed, from eleven to five cents in the case of 95 octanes, and 25 to 20 cents for 93 octanes.
The AA says because of the volatility of the factors which influence the local fuel price, movements are likely and the outlook will change before month-end.
Saudi Arabia says its initial investigations indicate that Iranian weapons were used in attacks on key oil installations and it "will invite U.N. and international experts to view the situation on the ground and to participate in the investigations."
A statement from the Saudi Ministry of Foreign Affairs on Monday says, "The kingdom will take the appropriate measures based on the results of the investigation, to ensure its security and stability."
The ministry says Saudi Arabia "affirms that it has the capability and resolve to defend its land and people, and to forcefully respond to these aggressions."
It called Saturday's attack that resulted in the suspension of approximately 50% of Saudi Aramco's production "an unprecedented act of aggression and sabotage" and "egregious crime which threatens international peace and security."
Additional reporting by African News Agency