International oil price topped $ 70 per barrel for the first time in a year

Saudi Arabia has reported that some of the world’s most protected oil infrastructure has been hit by missiles and drones in an escalation of regional hostilities that has pushed up oil prices.

Sunday’s attacks were intercepted, Saudi Arabia noted, and oil production does not appear to be affected. But the latest in a series of attacks claimed by Iranian-backed Houthi rebels pushed oil prices above $ 70 a barrel for the first time since January 2020.

Brent rose 2.9% to $ 71.37 a barrel on Monday, before slashing gains. Oil had already received a boost from an OPEC meeting last week

The attacks are the most severe against Saudi oil facilities since a key processing plant and two fields were attacked in September 2019, slashing production for about a month and exposing the vulnerability of the kingdom’s oil industry. Yemen’s Houthi fighters claimed responsibility for the attack, although Riyadh blamed rival Iran.

Saudi Arabia’s Energy Ministry reported on Sunday that an oil storage tank enclosure at the Ras Tanura export terminal on the country’s Persian Gulf coast was attacked by a drone from the sea. . Missile shards also fell near a residential complex for employees of the national oil company Saudi Aramco in Dhahran. The resort is home to families of Saudi employees and expatriates, and there is an American Consulate nearby.

Witnesses from the coastal town of Dhahran, where Aramco is also based, reported an explosion that rocked the town. Ras Tanura is about an hour’s drive down the coast.

“The two attacks did not cause injury or loss of life or property,” said a spokesman for the Saudi Ministry of Energy. Two people familiar with the situation also said that oil production had not been affected and that cargo continued in the Ras Tanura area on Monday, with tankers docking at the north quay and the islands of the sea.

Brent rose 2.9% to $ 71.37 a barrel on Monday, before slashing gains. Oil had already received a boost from an OPEC meeting last week, when ministers agreed to maintain production cuts.

“Overall, this was the most optimistic result we could have expected,” according to analysts at JPMorgan Chase & Co., Natasha Kaneva, in a note to customers.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, have debated whether to restore up to 1.5 million barrels per day of production. As part of the deal reached at a virtual meeting on Thursday, waivers were granted to Russia and Kazakhstan. The group’s next meeting is scheduled for April 1 to discuss May production levels.

Installation attacked

Ras Tanura is the world’s largest oil terminal, with the capacity to export around 6.5 million barrels per day, almost 7% of oil demand, and as such it is highly protected. The port includes a large fleet of storage tanks where crude is stored before being pumped to supertankers. A refinery located on the same site is the oldest and largest in Aramco.

A Saudi-led coalition has been fighting the Houthis since 2015. The conflict has claimed tens of thousands of lives and triggered what the United Nations has called the world’s worst humanitarian crisis.

The conflict has claimed the lives of tens of thousands of people and triggered what the United Nations has called the world’s worst humanitarian crisis.

On Sunday, the Saudi-led coalition said a recent US decision to revoke the Houthis’ designation as a terrorist group had prompted an increase in attacks. The Biden administration decided to revoke the designation after the UN warned of starvation. The Donald Trump administration adopted the designation towards the end of his term as president, a move that was seen as a way to increase pressure on Iran. Biden, during his campaign, pledged to join a nuclear pact between Iran and world powers.

“The Houthi attacks on Saudi Arabia are likely to further complicate the Biden administration’s efforts to negotiate a follow-up nuclear deal with the Iranians,” he wrote in an investigative note. Helima croft, Director of Global Commodity Strategy and Research for the Middle East and North Africa at RBC Capital Markets in New York.

With information from Bloomberg

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