Thu | Jun 8, 2023

Attack on Saudi oil site fuels upward march for crude prices

Published:Monday | March 8, 2021 | 9:36 AM
In this Wednesday, April 8, 2020, file photo, the sun sets behind an idle pump jack near Karnes City, USA. Oil prices pressed higher Monday, March 8, 2021, after strikes on major oil facilities in Saudi Arabia, the world’s largest oil exporter, shook energy markets. (AP Photo/Eric Gay, File)

BANGKOK (AP) — Oil prices rose Monday as Saudi Arabian oil facilities were targeted by drone strikes just days after the largest crude exporting nations in the world said they would not increase output.

Brent crude, the international standard, surpassed $70 per barrel for the first time in over a year, gaining $1.14 to $70.47 a barrel.

It surged $2.62 on Friday.

Benchmark US crude oil added $1.10 to $67.19 per barrel, up 1.7%, falling back from bigger gains earlier in the day.

It jumped $2.26 to $66.09 per barrel on Friday.

Crude prices have surged more than 30% this year as massive vaccination campaigns gain momentum, potentially signalling the beginning of the end of a global pandemic.

The attacks in Saudi Arabia follow a devastating winter freeze in Texas and other parts of the southern United States last month knocked out production of roughly four million barrels per day of US oil, pushing prices above $60 a barrel for the first time in more than a year.

The threats to the global oil supply are taking place with economists expecting energy demand to surge as nations recover from the pandemic.

In that environment, many energy analysts had expected the OPEC cartel and its allies to lift more restrictions and let the oil flow more freely.

But OPEC, rattled by plunging prices over the past year, chose not to open the spigots, sending prices higher still.

The strikes on Saudi sites have increased in frequency and precision in recent weeks, raising concerns about Saudi Arabia’s air defences and the expanding capabilities of the Iran-backed rebels across the border in Yemen.

A Saudi-led coalition launched an air campaign on war-torn Yemen’s capital and on other provinces Sunday in retaliation for missile and drone attacks on Saudi Arabia that were claimed by the Iranian-backed rebels.

Follow The Gleaner on Twitter and Instagram @JamaicaGleaner and on Facebook @GleanerJamaica. Send us a message on WhatsApp at 1-876-499-0169 or email us at onlinefeedback@gleanerjm.com or editors@gleanerjm.com.