The world’s oil security blanket has been torched

The real impact of the attack on Saudi oil installations goes well beyond the temporary loss of 5% of global oil production: It strikes at the heart of the mechanism that’s guaranteed the security of the world’s crude supply for most of the past 50 years.

Ever since the western oil majors lost control of output in the Middle East, Saudi Arabia’s willingness to maintain idle production capacity has been the world’s safety valve to offset its dependence on the volatile region.