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Middle East tensions push up oil prices

May 15, 2019 at 9:51 am

Tensions in the Middle East appear to be pushing up the price of oil, with a barrel of Brent crude now costing $71.75, an increase of 1.9 per cent. The cost of a barrel of US crude, meanwhile, is now $62.48, up 2.6 per cent.

The increases came after Saudi Arabia’s Energy Minister, Khaled Al-Falih, announced that a terrorist attack targeted two installations on Tuesday morning which pump oil through a pipeline from oil fields in the Kingdom’s Eastern Province to Yanbu Port on the west coast. The official added that Saudi Aramco will assess the damage and repair the plants. He stressed that Saudi oil production and exports will continue without interruption.

These developments came two days after two Saudi oil tankers were attacked near the coast of the UAE. Saudi officials said that such attacks pose a threat to the safety of international shipping and oil production.

Tensions have risen in the oil-rich region in recent weeks after Washington deployed an aircraft carrier battle group to the area in anticipation of an Iranian military response to economic sanctions. The Trump administration has pledged to reduce Iran’s oil exports to “zero” after it cancelled the sanctions exemptions granted to eight countries that depend on Iranian oil. The US has stressed that it will cover, along with Saudi Arabia and the UAE, the shortage that will result from the absence of Iranian oil in world markets.

READ: 2 Saudi oil tankers attacked near UAE territorial waters