“Strategic petroleum reserves are probably large enough in the U.S., China and the EU to cope with disruption to Saudi oil facilities or to the Straits of Hormuz,” he said.
Tail Risks
In the aftermath of Friday’s assassination, London’s Brent crude rose as high as $69.16 a barrel, the highest price since the attacks on Saudi Arabian oil infrastructure in September. However, the price had stabilized by the close of business in Asia, suggesting it might take a more concrete hit to supply for crude costs to remain elevated.
Still, economists remain wary.
“This is the last thing the world needs,” said Howie Lee, a Singapore-based economist at OCBC. “If oil prices spike, the resulting high inflation is likely to derail economic recovery. For all the attention that the U.S.-China trade war has garnered, it is a reminder that tail risks still exist in other pockets.”
This article was provided by Bloomberg News.