Crude Oil Surges After Saudi’s Drone Attacks

  • Crude Oil Surges After Saudi’s Drone Attacks

Global oil price rose on Tuesday following drone attacks on two of Saudi Arabia’s major oil pipelines, further escalating tensions in the Gulf Region.

Yemeni Houthi rebels aligned with Iran has since claimed responsibility for the attacks on the pipelines.

Al-Masirah, a spokesman for the militant told a Houthi-Run television station, that the group was “capable of carrying out qualitative operations on a larger scale deep inside aggressor countries”.

Saudi Energy Minister, Khalid al-Falih, said the attacks on the pumping stations “prove again that it is important for us to face terrorist entities, including the Houthi militias in Yemen that are backed by Iran”.

The energy minister said oil production was not affected and expects the oil-rich country to sustain global supplies.

Brent crude, against which Nigerian oil is measured, surged $1.09 to $71.32 per barrels before slightly pulling back to $70.96.

While Iran has denied any involvement in the attacks, Donald Trump has warned Iran against doing anything to harm US interests, especially in the region.

“If they (Iran) do anything, it would be a very bad mistake,” Trump warned at the White House.

The US ambassador to Riyadh, John Abizaid, however, told Saudi editors after the attacks that there is a need for “thorough investigation to understand what happened” to the tankers, adding “and then come up with reasonable responses short of war”.

“It’s not in their interest, it’s not in our interest, it’s not in Saudi Arabia’s interest to have a conflict,” he was quoted as saying by Arab News, a Saudi newspaper. “We certainly know that the ships were damaged. They were damaged by outside action of some sort.”

Iran’s ambassador to the UK,  Hamid Baeidinejad, said Iran is not in support of “any move to destabilise the region”. He added the circumstances of the vessel attacks on Sunday were “very suspicious” and warned that a US military build-up in the region could lead to a “miscalculation”.

“Unfortunately . . . whatever happens in the region that does not have any relevance to Iran is attributed to Iran or its so-called proxies,”

Mr Baeidinejad said: “If there are people in the White House or in the region that want to drag the United States into a military confrontation with Iran, they should understand that it will not only be devastating for the United States, it will be devastating for the region.”

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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