To combat crude oil price uncertainty, world must focus on electric vehicles

On Saturday, the Houthis, a Yemeni rebel group fighting against a coalition led by Saudi Arabia, took credit for a strike that knocked out two key Saudi oil processing facilities.

At a single stroke, Saudi oil production was cut from 9.8 million barrels a day to 4.1 million, sending prices soaring. That means about 5 per cent of the entire world’s oil production suddenly went offline. This is an unprecedented disruption bigger in absolute terms than any of the famous oil shocks of previous decades.

Naturally, the Saudis are scrambling to get production up and running again, and the country’s large stockpiles of oil should cushion the blow to customers. But, even though the Saudis say they have restored some of the lost production, world supplies may be limited because other nations simply don’t have much spare capacity to fill the gap.