Oil prices spike, gasoline prices to follow after Saudi attack

Even before we know the full extent of the damage to a major oil field and massive oil processing facility in Saudi Arabia, the price of a barrel of oil soared. After skyrocketing almost 20 percent in early trading, crude oil still settled higher at just under 14 percent for now.

Though oil markets did not go on a price spike frenzy, the increase averaged almost $8 a barrel and that could soon put a dent in consumers' wallets. 

"That translates at the pump to about twenty cents a gallon," said Professor Severin Borenstein, energy economist at the UC Berkeley Energy Institute at Haas School of Business. Borenstein also says though the Saudis say they can fix the damage soon, it's too early to tell. 

"We really don't know yet how much it's gonna show up at the pump because there's so much uncertainty about how it's gonna affect the flow of oil," said Borenstein.

When will price increases start to bite at the pump? 

"These refineries need to have stocks on hand, and they only carry a week or so of stock. So, very quickly, if there isn't oil arriving, they're gonna have problems," Borenstein says.  

Consumers should prepare to pay more for gas and that doesn't sit well with some.

"I don't think that's fair at all. But, like I said, you know, we're subject to the politicians, we got to do what it takes to keep our cars on the road, so we can afford to pay our bills, drive our cars and get to work," said Laurie Busse. 

Robert Lieber added, "I am a lucky person. I mean, I am able to afford these things and it doesn't affect me, but it affects billions of people."

The problem is the cutoff happened very suddenly. Other producers can increase their production and make up for some of the shortfall, but it takes time. 

"The main problem is they can't release any very quickly. There is an administrative process and there's just physical constraints to how quickly they can start pumping the oil," said Borenstein. "So, for the next few weeks or so, it's not really gonna have any effect." 

Investors also worry about the future security of Saudi oil operations as well as other political hot spots, such as the narrow, but major oil shipping channel of the Strait of Hormuz, site of recent attacks on oil tankers, will further drive prices higher. 

"It could lead to a pretty significant disruption of shipments from the Middle East which is where more than a third of the world's oil comes from," Borenstein says.