Brent Price Rises on Alleged Drone Attack on Saudi Aramco

Brent Price Rises on Alleged Drone Attack on Saudi Aramco

Brent oil price jumped 1.47% after reports that 10 explosives-laden drones launched by Yemen’s Houthi rebel group targeted facilities of Saudi Arabia’s state-owned oil company Saudi Aramco.

Oil trader saw reversal to earlier downward prices Monday following the attack on Aramco, though Saudi is yet to comment about the development or the level of damages.

Reacting to the news, International benchmark Brent increased $63.88 per barrel after closing Friday at $62.95 a barrel. American benchmark West Texas Intermediate (WTI) was at $60.17 per barrel for a 1.43% rise after it ended the previous session at $59.32 a barrel.

Oil markets have been moving sideways due to uncertainties from United States stock pile, side-effects from Astrazeneca vaccines which resulted to ban among some European countries.

Also, OPEC+ in a surprise move decided to incrementally raise output for May and June as against oil market expectation that there will be higher supply after members meeting in April 1st.

Amidst the uncertainties, Yemeni rebel forces hit Aramco’s refineries in Jeddah and Jubail with 10 drones, as well as sensitive military sites in the Khamis Mushait and Jizan regions with drones and ballistic missiles, the group’s spokesperson Yahya Saree said on Twitter.

“The operation has lasted from yesterday evening until dawn on Monday, the operation has successfully achieved its objectives. The armed forces confirmed that their operations continue and escalate as long as the aggression and siege on Yemen continue,” Saree said.

Saudi Arabia has yet to confirm the attack. However, tensions in the region had also risen after a cyber-attack on Iran’s main nuclear facility on Sunday, which Tehran’s nuclear energy chief described as a terrorist act that required retaliation.

Iran’s Foreign Minister Javad Zarif said on Monday that Israel was behind Sunday’s attack on the Natanz nuclear facility near Tehran. Yemen has been ravaged by violence and instability since 2014, when Houthi rebels captured much of the country, including the capital Sana’a.

A Saudi-led coalition aimed at reinstating the Yemeni government worsened the situation, causing one of the world’s worst man-made humanitarian crises, with 30 million people accounting for 80% of the population needing humanitarian assistance and protection.

Oil down over demand fears as India’s virus cases surge

In the early trading, oil prices were down as the coronavirus pandemic continues to threaten the oil demand recovery. India records the highest-ever surge in cases, making the country the second worst hit after the US.

International benchmark Brent crude was trading at $62.62 per barrel in the morning, falling 0.52% after closing Friday at $62.95 a barrel. American benchmark West Texas Intermediate (WTI) was at $58.98 per barrel at the same time for a 0.57% fall after it ended the previous session at $59.32 a barrel.

Lingering concerns over the oil demand recovery continue curbing oil prices after India confirmed a new record high of nearly 169,000 single-day cases on Monday.

The level that surpassed Brazil to become the second most-affected country globally after the US. India’s total cases have reached 13.52 million, according to the country’s Health Ministry.

The country’s death toll stands at 170,179, including 904 new fatalities as of Monday morning.

The price declines came despite positive remarks from the US Federal Reserve Chair Jerome Powell, saying the country’s economy is about to “start growing more quickly” even if COVID-19 remains a risk.

“What we’re seeing now is really an economy that seems to be much at an inflection point,” Powell said during an interview on CBS News’ “60 Minutes”. Powell said widespread vaccination and strong financial support would help provided there is not another COVID-19 wave.

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Brent Price Rises on Alleged Drone Attack on Saudi Aramco