Sep 24, 2019 - Energy & Environment

BP CEO: "Remarkable" that prices stabilized so fast after Saudi oil attack

Smoke billows from an Aramco oil facility, Sept. 14. Photo: AFP/Getty Images

Following the Sept. 14 attacks on Saudi Arabia's oil facilities, BP CEO Bob Dudley said he found it a "remarkable thing that the oil market settled down so quickly."

Why it matters: His comments, made to Axios in an interview Monday in New York, are the latest sign of how much has changed in the global oil industry over the last few years partly as a result of America's booming oil production.

Where things stand: The Sept. 14 attack on Saudi Arabian oil infrastructure knocked out 5.7 million barrels, more than half of the country's entire daily production and roughly 5% of the world’s daily production.

  • That led to a nearly 20% spike in oil prices on Sept. 15, the biggest jump in history. Gasoline prices, which are largely determined by global oil prices, have spiked in more than half the U.S.
  • But oil prices quickly dropped and have stabilized since the historic jump last week to hover around $60 a barrel. Pump prices, which rose a dime after the attacks to $2.66 a gallon, have also stabilized, according to AAA.

What they’re saying: I asked Dudley if he thought the oil market was adequately pricing in geopolitical tension in the Middle East.

  • “It’s a good question because markets usually get it right broadly,” said Dudley, who went on to cite the “resiliency” of Saudi Aramco, Saudi Arabia's state-owned oil company, and other production and storage around the world. “Tensions still remain, but I think it will play out over months and months here. I can’t fault the market.”

The big picture: Dudley’s reaction to the oil market news came before he and other CEOs of global oil and gas companies met in New York Monday to talk about a markedly different kind of risk the industry faces: the existential threat of climate change. The industry is facing growing pressure from investors, politicians and the public to offer solutions to a problem they are helping fuel.

What’s next: Stay tuned for more from our interview with Dudley and more news from events associated with the United Nations’ climate summit.

Go deeper: What oil price shock? American worries shift to the environment

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