Crude oil hits 7-year highs on supply concerns amid global political unrest

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Crude oil hits 7-year highs on supply concerns amid global political unrest

Oil prices
Image source: © Edhardream | Megapixl.com

Highlights

  • Crude oil prices rose on Tuesday.
  • The Houthi group of Yemen attacked the United Arab Emirates.
  • Russia has built a large troop presence near the border of Ukraine, stoking fear to invade.

On Tuesday, crude oil reached seven-year high levels on worries about global political unrest involving major oil producers like Russia and the UAE that could intensify the already tight supply outlook. The staggering rise in the prices of both the benchmarks was witnessed despite a surge in global coronavirus cases.

March delivery Brent Crude oil futures last traded at US$88.94 per barrel up 0.50%, whereas March delivery WTI crude oil futures traded 1.80% up at US$86.36 per barrel as of 19 January 2022 at 12:37 PM AEDT.

Yemen’s attack on the UAE

The Houthi group of Yemen attacked the United Arab Emirates by launching a drone and missile that exploded a fuel truck and killed three people. Furthermore, the Houthi movement warned it could target more facilities.

The damage to the oil facilities in the UAE raises the question of even more supply disruptions in the region in the ongoing year.

As a result of the attack, ADNOC, the UAE oil company, has activated business continuity plans to ensure an uninterrupted supply of products to local and international customers following the incident at its Mussafah fuel depot.

Meanwhile, Russia has built a large troop presence near the border of Ukraine, stoking fear to invade. Germany and the US discussed how to dissuade Russia, and it could block Russia's Nord Stream 2 gas pipeline to central Europe.

Oil prices

Source: © Bon4ire | Megapixl.com

Bottom Line

Crude oil prices reached seven-year high levels on Tuesday following an attack on the UAE by Yemen’s Houthi group.

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