Oil prices rise over attack in Saudi Arabia, members of Louisiana’s congressional delegation respond

Saudi Arabia attacks effect on gas prices

NEW ORLEANS, La. (WVUE) - Gasoline prices were expected to rise over the weekend attack on Saudi Arabia’s oil facilities and according to AAA. In Louisiana, gas prices increased by three cents a gallon for the start of the week, reaching an average of $2.20 per gallon for regular unleaded gasoline.

Some oil industry experts say it is reasonable to expect higher prices at the pump, at least in the short-term.

Eric Smith is with Tulane University’s Energy Institute and weighed in on the oil prices and gasoline debate.

"People should expect I think a short-term effect of about 10 cents a gallon at the filling station,” said Smith.

The attack on the Saudi Arabian oil equipment halted production of 5.7 million barrels of crude a day, which is more than half of Saudi Arabia’s global daily exports and over five percent of the world’s daily crude production.

While the effects of the attack are impactful, Smith does not expect Louisiana refineries and petrochemical plants to be impaired as a result.

"We have a surplus of Light Sweet crude which is primarily what the Saudis produce. We also, however, need a lot of heavy crude to run our refineries in Louisiana and Texas, so that crude, some of it comes out of Saudi Arabia, but that's about all we import from Saudi Arabia is the heavy crude,” Smith stated.

During stops in New Orleans on Monday (Sept. 16), two members of Louisiana’s congressional delegation noted that the U.S. is more energy independent.

Sen. Bill Cassidy, R-La., said that will help to reduce the impact of the attacks in Saudi Arabia.

"The United States is now the swing producer, meaning that we can ramp up production and can address any shortfalls, or some of the shortfall that would occur internationally because of this,” said Cassidy.

GOP House Minority Whip Steve Scalise, R-Metairie agreed.

"Obviously, with this attack you see more concern about oil prices and oil supply. I think on a bright note, the United States has continued to increase production, not only in the deep waters of the Gulf of Mexico where Louisiana leads the way, but in all of these shale plays around the country where so many other states have become energy producers,” said Scalise.

Smith added that a lot of crude is in storage.

"We're relatively independent right now,” he said.

But given the world's demand for oil, Smith says what Saudi Arabia produces remains critical to the global market.

"Right, the world needs 100 million barrels a day from somebody and the Saudis are typically able to produce anywhere from eight to 10 million barrels a day,” said Smith.

The White House believes Iran is to blame for the attacks on the facilities in Saudi Arabia.

Still, Cassidy is not in favor of the U.S. getting involved in a military conflict at this time.

“I don’t think the president wants a fight with anybody," Cassidy said. “Now how far this extends, I think this is a Saudi-Iranian fight. I don’t particularly care for our lives and our treasure to be involved in that fight.”

Scalise says the recent volatility drives home an important message.

"This reminds us once again just how dangerous that part of the world is, but also why we don’t want to be too dependent on oil from just one place and why it’s important we produce our own energy now in America,” said Scalise.

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