Yemen houthi militants attacked Saudi oil facilities by drones last Saturday, the incident led to the Saudi oil supply reduce 5.7 million barrels per day, accounts for about 50% of Saudi oil production. The Saudi oil disruption is the worst in history, surpassing the disruptions to Kuwait and Iraq in August 1990 and the loss of Iranian production during the islamic revolution of 1979.
The impact of a short period of supply interruption is relatively controllable, but if it is not restored in a short period of time, it will be difficult for the global spare capacity to fill such a large supply gap in a short period of time, and the market will face a serious risk of supply interruption.
Brent crude opened up 19%, its biggest intraday gain since 1991. Given that Saudi oil supply disruptions are likely to last for months, the surge may be just the beginning.