Oil price falls after climbing above record $70
Brent crude, the global oil benchmark, has dipped after rising above the $70 per barrel mark on Monday for the first time in over 14 months.
Brent stood at $69.58 per barrel as of 12:41pm GMT on Monday, down from as high as $71.38 per barrel in early Asian trade, its highest since Jan. 8, 2020.
The rapid rise in prices this morning came as Saudi Arabia’s energy ministry reported a drone attack on March 7 morning that hit a petroleum storage tank at the Ras Tanura port.
The drone attack ignited fears over disruptions in global oil supply, and a confluence of bullish political and economic developments provided further tailwind to the market, according to S&P Global Platts.
The attack, launched by Iranian-backed Houthi rebels from Yemen, galvanised fears over the security of the global oil supplies as the Ras Tanura port is one of the world’s largest oil shipping ports, with 33 million barrels of storage capacity and three terminals that export all of Saudi Arabia’s key crude oil grades, in addition to exporting condensates and refined products.
“Any disruption to the Middle East supply chain could shoot oil prices considerably higher. Indeed, this could be the flashpoint that ignites that smoldering Middle East powder keg as apparent lines in the sand got crossed when the attacks targeted civilians,” warned Stephen Innes, chief global market strategist at Axi, in a March 8 note.
