Oil Looks Positive as Saudi Terminal Attacks Spur Price Above $70

By Adedapo Adesanya

The Brent crude edged closer to $71 per barrel on Monday morning after oil giant, Saudi Arabia, confirmed that one of its facilities, which is the world’s largest crude terminal, was attacked.

As at the time of this report, the global crude benchmark, which most countries prices their futures against, was trading at $70.50 per barrel, while the United States’ benchmark, the West Texas Intermediate (WTI), was up by 1.66 per cent to sell at $67.19.

Saudi had said a storage tank at Ras Tanura located in the country’s Gulf coast was attacked on Sunday by a drone from the sea but output appeared to be unaffected after the missiles and drones were intercepted.

The terminal is capable of exporting roughly 6.5 million barrels a day, which is nearly 7 per cent of oil demand and is considered as one of the worlds’ most protected installations.

The assault follows a recent escalation of hostilities in the Middle East region after Yemen’s Houthi rebels launched a series of attacks on Saudi Arabia.

The latest attack has been viewed as the most serious in the last two years since a key processing facility and two oil fields came under fire in September 2019, cutting oil production for several days.

Although the Houthi rebels claimed responsibility, the Kingdom pointed its fingers at its Gulf rival, Iran, as the culprit, further adding to tensions in the region.

Notably, the new Joe Biden administration of the US has also carried out airstrikes in Syria last month on sites it said were connected with Iran-backed groups.

Oil climbed last week after the Organisation of the Petroleum Exporting Countries and allies (OPEC+) made a surprise pledge to keep output steady in April, boosting oil prices to their best in more than 13 months.

The move prompted a number of investment banks to raise their price forecasts, with Goldman Sachs Group estimating global benchmark Brent will top $80 a barrel in the third quarter of 2021.

Oil prices are expected to perform at their best this week as President Biden is on the point of his first legislative win with the House ready to pass his $1.9 trillion COVID-19 relief plan, the second-biggest economic stimulus in American history.