US, Brent crudes rise on Middle East tensions

Crude oil prices jumped as much as 2% Thursday as tensions in the Middle East grew, with a Saudi-led coalition launching air strikes in retaliation for recent attacks on its oil infrastructure.

U.S. West Texas Intermediate crude futures settled 85 cents higher, at $62.87 per barrel, gaining 1.4% and closing at the highest level in two weeks, Kallanish Energy reports.

Brent crude futures rose 85 cents, or 1.2%, to $72.62/Bbl. Brent touched its highest level in three weeks earlier in Thursday’s session.

The Saudi-led military coalition in Yemen carried out several air strikes on the Houthi-held capital Sanaa Thursday, Reuters reported, after the Iranian-aligned movement claimed responsibility for drone attacks on two Saudi oil pumping stations earlier in the week.

Saudi Arabia’s deputy defense minister accused Iran of ordering the drone attack on the pumping stations. It comes after attacks on four oil tankers off the coast of United Arab Emirates on Sunday.

Taken together, the escalation of tensions has compounded fears of supply disruption in the Middle East.

Iraq’s oil minister Thamer Ghadhban said Thursday international oil companies have said they are operating as normal in the country, Iran’s direct neighbor.

Asian shippers and refiners have put ships heading to the Middle East on alert and are expecting a possible rise in marine insurance premiums after the attacks.

The market still faces uncertainty over whether Opec and other producers, known as Opec+, will continue supply cuts of roughly 1.2 million barrels per day that have boosted prices more than 30% so far this year.

Ghadhan said the next meeting of OPEC’s joint monitoring committee will assess the commitment of member and non-member countries to the production cuts.

The Opec+ group of producers, which includes Russia, meets next month to review whether to maintain the pact beyond June.

This post appeared first on Kallanish Energy News.