Brent oil(XBRUSD) on Monday rose 1.52% to above $70 per barrel for the first time since the inception of the pandemic in early 2020, while WTI crude is at two years high near $67.3 per barrel after the key Saudi Arabian oil facilities being attacked.
According to the chief global markets strategist, Stephen Innes at Axi, Iran-backed Houthi rebels unleashed a hostile attack on the Saudi’s most protected crude facilities and military bases. Drones and missiles were fired by the Yemen’s Houthi at key facilities including a Saudi Amraco facility located at Ras Tanura. However, the crude production appeared to be unaffected as those missile and drone attacks were intercepted according to Saudi. Nevertheless, the escalation of hostilities has sent oil prices surging above $70.
Ras Tanura is the world’s largest oil terminal. Daily exports can reach approximately 6.5 million barrels, which represent 7% of the world’s oil demand. Further escalation and potential halt to oil production may see oil prices continuing to surge higher.
Despite the rising crude prices upon OPEC announced to keep output largely unchanged in April, Saudi Arabia’s oil minister raised doubts on the speed of recovery in oil demand. According to India, the world’s third-largest crude importer, higher crude prices could undermine oil consumption in some countries.
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