Saudi Arabia’s Energy Facilities are Attacked Oil Prices Soar Above 70 U.S. Dollars

Saudi Arabia stated that after an attack on an energy facility in the country, oil prices broke through US$70 per barrel in early Asian trading, continuing the rise last week after OPEC+ said it would maintain stable production.

London market crude oil futures once soared 2.6%, and rose 4.9% last week. Saudi Arabia said an oil storage tank in the country’s Ras Tanura port was attacked by a drone from the sea on Sunday. UAVs and missiles were intercepted by Saudi Arabia, and crude oil production seems unaffected.

As one of the world’s largest oil ports, the daily export capacity of Ras Tanura Port is approximately 6.5 million barrels, making it one of the most protected oil facilities in the world. After the Yemeni Houthis launched a series of attacks against Saudi Arabia, the hostilities in the Middle East have recently escalated.

Last week, Saudi Arabia and OPEC+ unexpectedly promised to maintain stable production in April and oil prices rose, which accelerated the upward momentum of oil prices since the beginning of the year. This has prompted many investment banks to raise their oil price forecasts. Goldman Sachs (327.37, -1.92, -0.58%) predicts that Brent crude oil, a global benchmark, will exceed $80 per barrel in the third quarter.

The Brent crude oil futures for delivery in May rose 2.2% to 70.87 US dollars per barrel on the ICE Futures European Exchange; it previously hit 71.16 US dollars, the highest level since January 2020. WTI crude oil futures for delivery in April rose 2.2% to $67.54 on the New York Mercantile Exchange; it rose 3.5% on the previous trading day.

This is the most serious attack on Saudi oil facilities since September 2019. At that time, an important processing facility and two oil fields in the country were attacked, resulting in consecutive days of production cuts and exposing the fragility of the Saudi oil industry. The Houthis claimed responsibility for the attack on Sunday, but Saudi Arabia pointed the finger at Iran.

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