Oil prices are soaring, with Brent crude oil, the European benchmark, and U.S. WTI jumping more than 6% on Monday, driven by rising tensions in the Middle East and stalled peace talks in Ukraine.
At around 14:25 GMT (15:25 in Paris), a barrel of North Sea Brent crude for May delivery was up 6.41% at USD 114.85. The barrel of West Texas Intermediate (WTI) for delivery in April gained 6.05% to 111.03 USD. The two references of black gold are back above USD 110 per barrel (+47% since the beginning of the year).
The world’s largest producer, Saudi Arabia, the world’s largest exporter of crude oil, warned on Monday 21 March against the risk of a decline in oil supplies, due to attacks by rebels in neighbouring Yemen against its oil facilities. The country had announced on Sunday, March 20, a “temporary reduction” of its oil production in one of the facilities of the giant Aramco, hit by an attack by the Houthi rebels of Yemen.
The Yemeni, Houthis have launched several nightly drone and missile attacks against targets in Saudi Arabia, the country leading a military coalition in Yemen that has supported the government since 2015 against the Iranian-backed Houthis. “Saudi Arabia will not take responsibility for any shortage of oil supplies on world markets in light of the attacks on its oil facilities,” the foreign ministry said.
“The attack is another unfortunate reminder of the uncertainty currently affecting global oil markets,” said Michael Hewson, an analyst at CMC Markets. It comes amid strong fears of disruptions to global crude supplies, compounded by tension in Ukraine, as Russia is among the world’s largest crude oil exporters.
The world is very unstable with the war in Ukraine and tensions in the Middle East and “create an existing imbalance between supply and demand in the market,” said Victoria Scholar, an analyst at Interactive investor.
Ukrainian President Volodymyr Zelensky called on Monday, March 21, for the European Union to stop all “trade” with Russia, including denying its energy resources, in a video on the Telegram messenger.