According to an expert, gas prices in the United States would increase by 25 cents per gallon

Attacks on crucial oil facilities in Saudi Arabia crippled the second largest oil producer in the world and provoked new geopolitical tensions. But the suffering felt by consumers will depend on the time it takes to return to normal production.

The weekend's drone strikes have been the biggest disruption in the Saudi oil industry since the early 1990s, but if crude stocks can invade world markets and production rebounds rapidly episode will have only a negligible effect on prices at the pump.

If the recovery were to take weeks or months, the impact could be significant. Rising fuel prices may not only encourage consumers to reduce their spending elsewhere, but also affect virtually every sector of the economy. Airlines, cruise ships, trucking companies, railways and retailers will all feel the effects of rising fuel prices.

Saudi Aramco, a state-owned company, produced 9.85 million barrels a day in August, according to the US Energy Information Administration. But Saturday's attack on an oil processing plant and a nearby oil field forced the kingdom to suspend production of 5.7 million barrels of crude oil, or nearly 6 percent of the 100 million barrels consumed each day by the world.

The situation weighed on Wall Street, lowering the Dow Jones industrial average by more than 165 points before the benchmark recovered somewhat. The Dow closed 142 points, about 0.5%, ending the day at 27,076 points. Standard & Poor's 500 and Nasdaq high-tech composites declined by about 0.3% each. The S & P index closed at 2,997. The Nasdaq closed at 8,153.

The Saudi company had initially indicated that it hoped to be able to restore a third of that lost production – about 2 million barrels – by Monday, and it gave no timetable for its full recovery. The prospect of tightening supplies has resulted in an increase in energy stocks, as oil prices jumped by about 13%, one of the strongest days in their history. Brent crude futures traded at $ 68 per barrel at approximately 4 pm Monday; The US West Texas broker was trading at over $ 61 a barrel.

Shares of major international oil companies – known as supermajors – have climbed into global markets. The US oil giant, ExxonMobil, rose 1.5% to 73.73 dollars; Chevron finished at $ 124.12, up more than 2%; BP rose nearly 4% to $ 39.35. The companies serving and supplying supermajors and producers in the Middle East have grown further. Schlumberger Limited jumped 5.3% and Halliburton by 11% on business growth forecasts after the attacks.

"The Schlumbergers and the Halliburtons provide equipment for drilling, so if we experience a major supply disruption as is the case now, they will have to drill and probably repair it" said Bill Selesky of Argus Research. "That's why these two are selling very well today."

Consumers could consider an increase in the price of gasoline from 10 to 25 cents in the coming weeks, said Ed Moya, an analyst at OANDA. Although this jump is relatively modest, it would intervene at an inopportune moment, threatening the most powerful engine of the US economy in the face of growing fears of a slowdown.

"All confidence indicators have softened and any pressure on the consumer could derail the record of stock appreciation observed in recent weeks," said Moya.

Consumer spending drives about 70 percent of the US economy and retail sales increased in August, as other key economic indicators weakened under the weight of the trade war with China.

The US manufacturing sector contracted in August for the first time since 2016, and the Commerce Department recently revised its economic growth forecast for the second quarter, as growth slowed more than expected. At the same time, ongoing trade tensions and signs of slowdown are driving investors into the bond market in droves.

As the drop in demand has led to a drop in gasoline prices after Labor Day, consumers should be able to withstand a surge in short-term prices more easily. On Monday, the average price of a gallon of gasoline in the United States was $ 2.56 according to AAA, about 28 cents less than last year.

"Soaring oil prices due to the geopolitical crises of the past have had a depressing impact on US consumers when they have been refueling," said Ed Yardeni, chairman of Yardeni Research. "It costs them a little more money when they are refueling, so consumers are afraid and cut back on spending in other areas." This is harming the economy. "

Despite soaring oil prices on Monday, prices are far from record highs. In June 2014, the price of oil was $ 105.40 per barrel. Since then, oil prices have fallen and the S & P 500's energy sector index has also fallen. Monday afternoon's S & P Energy Index was up 3.6%, which is one of its best days of the year but remains down more than 36% since June 2014, according to Howard Silverblatt of S & P Dow Jones Indices.

Moya estimated that an increase would last about a month, provided that political tensions lessen and that there are no more attacks. Authorities said Saudi Arabia 's oil stocks would allow it to meet its export obligations for several weeks, while Aramco is recovering, and that OPEC and Russia refrain from releasing additional supplies at the moment, despite the magnitude of the disturbances.

Aramco would consider deferring its original public offering until production returns to normal.

"I do not think even Aramco's limited listing on the Saudi stock market can withstand this event," said John Kilduff of Again Capital. "This attack is a significant adverse change for the company.They will have to do a lot more risk disclosure in their IPO document with regard to Iran and the region."

If Saudi production does not recover quickly, this will have consequences for other consumer travel expenses. In 2018, the global airline industry spent $ 180 billion in fuel, accounting for 23.5% of operating expenses, according to the International Air Transport Association.

"Cruise ships and airlines have been hardest hit by this price spike," said Moya. "I think you would see a little waiting period, but these costs would be transferred, and you will certainly see that weigh on the consumer."

Carnival, United Airlines and Delta Airlines cruise companies all ended the day.

On Sunday, President Donald Trump announced via Twitter that he had authorized the release of an unspecified amount of crude oil from the strategic oil reserve in order to "keep the markets well stocked." The 600-million barrel reserve is only exploited under extreme circumstances, and it takes 13 days for SPR oil to reach the markets after a presidential decision.

"Make no mistake: the loss of more than 5% of global supply is an emergency supply," said Bob Tippee, editor of the Oil & Gas Journal. "There have been withdrawals for much less painful reasons."

The United States was both the largest producer and the largest consumer of oil in the world in 2018, according to the US Energy Information Administration. In a tweet on Monday, Trump said the United States was not dependent on oil from the Middle East but would free up their reserves to help their allies.

"Because we have done so well with energy over the past few years (thanks, sir!), We are a net exporter of energy and, at present, the leading producer of energy. energy in the world, "tweeted Trump. "We do not need oil and gas from the Middle East, and in fact we have very few tankers, but we are going to help our allies!"

Kilduff said that the United States is not a net exporter of crude oil, but that a total exporter of energy could mean something else.

"We are not a net exporter of crude oil," Kilduff said. "All issues relating to other petroleum products should be included to conclude that we are a net exporter of energy."