Petrol prices and airfares may rise after drone strikes on Saudi Arabia oil empire

Smoke fills the sky at the Abqaiq oil processing facility on Saturday in Saudi Arabia. Photo / AP

Motorists could see high petrol prices within days following Saturday's drone attacks on Saudi Arabia's oil facilities by Iranian-backed Yemini rebels.

"It's not a good sign," said Automobile Association spokesman Mark Stockdale.

"It remains to be seen what impact it will have, how markets respond. But certainly a reduction in the supply in oil could have a negative impact on commodity prices which could result in higher prices at the pump."

In this image made from a video broadcast on the Saudi-owned Al-Arabiya satellite news channel on Saturday. Photo / AP

In what's been labelled the most serious attack on Saudi Arabia's oil infrastructure in decades, the explosions may have knocked out half of the kingdom's oil output for days or more.

Stockdale said the oil market had been very stable beforehand, despite other geopolitical issues threatening to push commodity prices higher.

"But that hadn't happened and we've avoided increases in pump prices. So it's difficult to know what's going to happen."

Analysts are expecting a sharp reaction when markets open overnight.

"This is a big deal," Andrew Lipow, president of Lipow Oil Associates told CNBC.

"Fearing the worst, I expect that the market will open up $5 to $10 per barrel on Sunday evening."

Brent crude, the global price benchmark, closed at US$60.22 per barrel on Friday.

BP spokesman Gordon Gillan said the attacks could mean higher prices at the fuel pump.

"Our prices are reflective of the barrel price, on international markets and other influencing factors, so it's possible there could be an impact on local prices later this week. But we wouldn't want to speculate."

Asked whether any change to global oil prices would necessarily mean an immediate increase in petrol prices here, he said: "We review our BP Connect prices everyday so our prices are as competitive as possible.

"It could change tomorrow, it could be the next day."

Meanwhile, jet fuel prices will go up if there is any increase in the cost of crude oil and this could lead to fares rises.

Fuel makes up at least 25 per cent of airlines' operating costs and jet fuel is now at $US77 a barrel, nearing the top of the range for carriers to hold prices. Airlines will cut capacity if fuel prices rise steeply and this too can lead to fare increases.

This year Air New Zealand expects to spend $1.3 billion on fuel, based on an average jet fuel price of $75 a barrel.

A Government spokesman said there would be no comment on the drone strikes in Saudi Arabia until tomorrow.