U.S. gas prices will increase about 20 cents per gallon because of the recent attacks in Saudi Arabia, oil analyst Andy Lipow predicted Monday on CNBC.
That should lead the national price-per-gallon average to surpass $2.70 “over the next week to 10 days,” Lipow said on “Power Lunch.” The average for a regular gallon has been roughly $2.56 for the last week, according to AAA.
“There is really going to be some sticker shock from the consumer, really starting tomorrow,” said Lipow, president of the Houston, Texas-based consulting firm Lipow Oil Associates.
Saudi oil facilities in Abqaiq and Khurais were struck over the weekend, with fire damage halting production of half the country’s global daily oil exports. Yemen’s Houthi rebels have claimed responsibility for the attack.
But Secretary of State Mike Pompeo said on Saturday that Iran is responsible, and on Monday, a Saudi-led military coalition said the attack was carried out by “Iranian weapons” and did not originate from Yemen.
Brent crude futures, the international benchmark, saw its biggest intraday jump at the open, soaring as much as 19.5% to $71.95 per barrel. The contract settled at $69.06, up $8.84 or 14.71%, by early afternoon.
U.S. West Texas Intermediate futures finished the day at $62.90, up $8.05 or 14.8%.
Saudi Aramco, the national oil company, reportedly aims to restore about a third of its crude output, or 2 million barrels, by Monday.
Lipow, who has worked in the oil industry for more than three decades, said his price prediction was based on roughly 5 million barrels of oil production per day being off the market for about three weeks.
While some parts of the production facility may be restarted sooner, Lipow said, damage to other parts of the Abqaiq production facility could “keep it offline for months.”
On Sunday, President Donald Trump tweeted that he authorized the release of oil from the U.S. Strategic Petroleum Reserve, if needed, to keep the market well supplied.
— CNBC’s Yun Li contributed to this story.