Fires burn in the distance after a drone strikeon Saudi company Aramco’s oil processing facilities over the weekend. Picture: Reuters.

Johannesburg - Until Saturday’s drone attacks on Saudi Arabia’s Abqaiq oil refinery, the rand and oil price stars seemed to be aligning towards a small petrol price decrease of around 11 cents a litre, while the diesel price seemed set for a very slight increase of less than nine cents.

However, the drone strikes have caused international oil prices to surge, initially by 20 percent, the highest spike in over 30 years. Although oil prices have since recovered to $66.36 at the time of writing, this is still high enough to lead to a substantial fuel price increase at the end of the month, considering that the most recent daily price was 50 cents in the red, although the positive monthly average so far should cancel most of that out, at least for this month.

This set of events makes it impossible to accurately predict September’s fuel price movements, although with world markets considerably rattled, there is a lot of risk in the air.

Not only did the strikes disrupt five percent of the world’s oil production, something that could take weeks or more to fix, but the fear of further strikes could keep the oil market jittery for quite some time.

In fact, following the strikes some analysts said prices could rise towards the $100 mark if Middle East tensions reignited.

On a more positive note, however, the Automobile Association noted that the US President has authorised the release of oil from that country's Strategic Petroleum Reserve, which “should calm some oil price nerves.” 

However the potential for copycat attacks on other oil installations, now that their vulnerability is clear, remains a concern, the AA added.

The AA also said that South Africa’s heavy reliance on petroleum imports was worrying:

"We believe government should review short-term risk mitigations, including increased biofuel production, electric vehicles, and better public transport,” the AA said.

“Given the recent developments, these mitigations should now become urgent priorities for government".

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