This is an attack on the world's largest oil processing plant in Abqaiq and Khurais. This will reduce output by around 5.7 million barrels of crude oil per day. This corresponds to around 5% of global oil demand.
According to the International Energy Agency (IEA), Saudi Arabia produced around 9.8 million barrels per day in the second quarter of 2019. This means that around 50% of Saudi Arabia's crude oil production is affected.
The crude oil price of the West Texas Intermediate (WTI) brand rose by more than 15 % in the short term. This corresponds to a crude oil price of around USD 62 per barrel and thus the price level of last May.
What does that mean?
The economic dependence on crude oil has drastically decreased in recent years. According to World Bank data, less and less oil is needed globally to generate the same GDP. Every 10 years, the amount of crude oil needed to achieve the same value is reduced by around 15%.
If there is no further significant increase in oil prices, the economic consequences will therefore remain limited or negligible.
There will be no immediate changes to the direction of the monetary policy. For their monetary policy decisions, the monetary authorities consider the measure of inflation without the volatile energy and food prices. This measure is too low in the eurozone compared to the target of the European Central Bank (ECB), which is why the ECB is on easing mode again since last Thursday.
The Fed is also likely to make another rate cut on Wednesday evening. The inflation barometer it is looking at, the so-called PCE core rate, stands at 1.6 % and is below the target of 2 %. If at all, the recent rise in oil prices would support the argument of a monetary easing.
In the oil market, there is also excess capacity. According to the IEA, in the organisation of oil-exporting countries (Opec) alone it amounts to around 3.3 million barrels per day, of which 2.2 million fall back to Saudi Arabia. The remainder of this capacity is held by the United Arab Emirates, Iraq and Kuwait.
And there are reserves. In the OECD country group, the state-controlled reserves (as of June 2019) amount to around 1226 million barrels of crude oil. This could theoretically compensate for the loss of Saudi production for 215 days. Saudi Arabia itself has reserves for around 30 - 45 days without having to resort to the refinery facilities.
The attacks hit the oil market hard. Saudi Arabia is the third largest oil producer in the world (after the US and Russia). Both the time and the place of the attack lead to a tension in the crude oil market.
Saudi Arabia is of particular importance for the market because the surplus capacities meant that the country was able to increase production immediately. This is not possible to the same extent now. The attack has also highlighted the vulnerability of Saudi crude oil production.
Further development depends on the various players in the Middle East. Military action against Iran, suspected by some to be the mastermind, would inevitably lead to a further rise in prices, especially if important oil export routes such as the Strait of Hormuz were impaired.