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An attack on Saudi Arabia’s oil processing plant at Abqaiq has left the world with 5.7 million fewer barrels of oil a day. That’s the biggest ever sudden disruption to global oil supply.

Here’s why it has major implications for the world bloom.bg/2ApupAx
Just a few days ago, OPEC+ oil ministers were complaining about there being too much oil left after more than two and a half years of supply restrictions.

Now, the question is whether the world has enough oil bloom.bg/2ApupAx
Emergency stockpiles have only been used three times since the IEA was formed in 1974:

🛢️1990
🛢️2005
🛢️2011

There’s more than enough oil in the stockpiles to cover the loss of Saudi supplies for three months. After that, it gets a bit tighter bloom.bg/2ApupAx
The attack means several things for the economy and markets. As oil prices rise...

💵The dollar will weaken
📉European markets will take a huge hit compared to the U.S.
✂️The Fed is more likely to implement further rate cuts bloom.bg/2Al2LV5
Responsibility has been claimed by Houthi rebels in Yemen, but there’s also suspicion that Shiite militias in Iraq were the culprits.

In geopolitical terms, it might not make a difference: Both groups are proxies for Iran bloom.bg/2Am69PH
The Trump administration should act swiftly to present proof of Iran’s culpability before the international community, and press for a unified response.

The UN General Assembly this week provides a perfect platform to do so bloom.bg/2Am69PH
It’s possible that the next few days will build toward the most momentous foreign policy challenge Trump will experience.

The danger is that he will find military confrontations overseas a useful avenue for a political boost ahead of 2020’s election bloom.bg/2Al3C8f
Abqaiq’s importance also raises an existential question for the oil market.

What better argument for electrification than the spectacle of a market thrown into chaos by reports of drones taking shots at a single facility most people have never heard of? bloom.bg/2AlRhRx
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