Crude Oil Price Rebounds to $73 over Middle East Tensions

Ejiofor Alike with agency reports

Crude oil price Thursday rose for a third day running rebounding to $73.28 per barrel as fears of supply disruption amid heightened tensions in the Middle East overshadowed swelling United States crude inventories.

While the global benchmark, Brent settled at $73.28, after rising by $1.51and heading for the biggest weekly rise in about three months, the US West Texas Intermediate (WTI) crude rose by 83 cents to $62.85.
Brent had in the recent months hit $76 before it slumped to $70 per barrel.

Crude oil price was drawing support from the risk of conflict in the Middle East, with helicopters carrying US staff from the US embassy in Baghdad on Wednesday out of apparent concern over perceived threats from Iran.

Reuters also reported that Saudi Arabia’s Deputy Defence Minister, Prince Khalid bin Salman, a son of King Salman, Thursday accused Iran of ordering an attack on Saudi oil pumping stations that Yemen’s Iran-aligned Houthi militia has claimed responsibility for.
The attack “proves that these militias are merely a tool that Iran’s regime uses to implement its expansionist agenda,” tweeted Prince Khalid bin Salman.

“The terrorist acts, ordered by the regime in Tehran, and carried out by the Houthis, are tightening the noose around the ongoing political efforts.”

The Houthis, which have been battling a Saudi-led military coalition for four years, said they carried out Tuesday’s drone strikes against the East-West pipeline, which caused a fire but Riyadh said did not disrupt oil output or exports.
However, the Head of the Houthis’ Supreme Revolutionary Committee, Mohammed Ali al-Houthi, has denied that Iran directed the strike and said the movement manufactures its drones locally.

Tehran has also reportedly denied providing arms to the Houthis.
“We are not agents for anyone,” Mohammed Ali al-Houthi told Reuters.
“We make decisions independently and do not take orders for drones or anything else.”

Other Saudi officials have also reportedly fired off similar tweets, ratcheting up pressure on the kingdom’s regional arch-enemy amid heightened tension between Washington and Tehran over sanctions and US military presence in the Gulf.

“The Houthis are an integral part of the Revolutionary Guard forces of Iran and follow their orders, as proven by them targeting installations in the kingdom,” Saudi’s Minister of State for Foreign Affairs Adel al-Jubeir tweeted.

The country’s Ambassador to Yemen followed up, writing that the Houthis had “made Yemen a platform for Iranian terrorism against Yemenis and their interests, and a tool to attack Saudi Arabia.”

Saudi Arabia’s main English newspaper called for “surgical strikes” against Iran.
“Our point of view is that they must be hit hard,” said an Arab News editorial. “We call for a decisive, punitive reaction to what happened so that Iran knows that every single move they make will have consequences.”

The coalition, which receives arms and intelligence from Western nations, carried out air strikes yesterday in and around Yemen’s capital Sanaa, which the Houthis control.

The drone attack reportedly happened two days after four vessels, including two Saudi oil tankers, were damaged by sabotage off the coast of the United Arab Emirates.

The other ships were a Norwegian-registered oil products tanker and a UAE-flagged bunker barge.
The UAE has not blamed anyone for that incident, which is being investigated and from which Iran has distanced itself.
United States officials believe Iran encouraged the Houthis or Iraq-based Shi’ite militias to carry out the attack.

Meanwhile, the UN Secretary General, Antonio Guterres, has condemned the attacks and called for “maximum restraint” by all sides.
The attacks took place against a backdrop of United States-Iranian tension following Washington’s decision this month to try to cut Tehran’s oil exports to zero and beef up its military presence in the Gulf in response to what it called Iranian threats.
Saudi Arabia and the UAE back the sanctions against Iran, a fellow OPEC producer but regional foe.

Though the tensions have pushed up oil prices, a rise in US crude oil inventories to their highest since 2017 helped to cap prices.
Also keeping prices in check is uncertainty about whether the Organisation of the Petroleum Exporting Countries (OPEC) and other producers will continue supply cuts that have raised oil prices by more than 30 per cent so far this year.
OPEC said on Tuesday that world demand for its oil would be higher than expected this year.