While the political arguments continue over who was behind the drone attack that drastically affected oil production in Saudi, and the destabilising affect it could have in the region, domestic attention immediately switched to the impact of the weekend’s events on the price of fuel.
The head of Nato, Jens Stoltenberg, is right to be concerned that tensions will escalate after the unprecedented strikes on facilities at Abqaiq, home to the world’s largest oil processing plant, and on the Khurais oilfield.
There are fears the attack could lead to further conflict following the inevitable sabre-rattling from US President Donald Trump, not known for his subtle approach to international diplomacy, and an equally bellicose reaction from the Iranians, who have blamed the attack on Yemen’s Houthi rebels.
Inevitably, the price of oil leapt, initially by 20 per cent – the biggest one-day rise since the 1001 Gulf War – before falling back later. At one point the international benchmark used by traders, Brent Crude, climbed to a whisker below 72$ a barrel.
The impact of what is in effect a five per cent cut in global oil supplies will inevitably mean prices will rise at the pumps; simple demand and supply economics dictates that.
For industries such as ours, dependent on diesel to run thirsty machinery in order to deliver new roads, paths, car parks and other vital infrastructure, this will be another challenge to face. While many domestic consumers will – rightly – complain about the extra tenner it costs to fill their tank, businesses will face a much steeper rise in overheads.
Tarmacing businesses such as Getting There Groundworks will either have to absorb the price rise or pass it on to clients, and that’s never a popular move – and all this at a time when Brexit uncertainty is already causing problems for industry.
Perhaps government, which already takes more than half of what we pay for a litre of petrol or diesel in fuel duty and VAT, could find a way to absorb this extra unwanted increase in our overheads by temporarily reducing the duty. I won’t hold my breath.