Oil prices rise after tanker attacks off the coast of the United Arab Emirates

Oil prices rise after tanker attacks off the coast of the United Arab Emirates

Oil prices increase as tanker attacks in Middle East increase supply concerns, Russian media reported citing to Dmitriy Alexandrov, an expert at the investment company Univer Capital.

Brent crude futures – the global benchmark – gained 0.65% to trade at $71.87 a barrel. The market pared those gains later as the escalating US-China trade war clouded the outlook for global oil demand growth.

“A series of reports of attacks on tankers in various places is locally positive for oil prices, since problems have occurred in key infrastructure facilities that are dealing with oil supply to both European and Asian markets,” the expert concluded.

On Sunday, May 12, the UAE announced that four of its commercial vessels were attacked in its territorial waters. Separately, Saudi Arabia said that two of its oil tankers have been targeted by a “sabotage attack” near the UAE coast. The attack was described as an attempt to disrupt global crude supplies. It was stated by Khalid bin Abdulaziz Al-Falih , Minister of Energy, Industry and Mineral Resources of Saudi Arabia. However, additional details on the attacks were not provided, including the nature of the perpetrators.

Shipping and ports were not disrupted. Ministry of Foreign Affairs of Egypt and the Gulf Cooperation Council have condemned the attack.

As for the influence of US-China trade relations on the global oil market, oil traders are in a “pending mode” as it became known that US President Donald Trump will hold a meeting with PRC leader Xi Jinping and discuss bilateral trade issues at the G20 summit in Japan in late June. Participants of the “black gold” market expect that Washington and Beijing will be able to negotiate, and trade “war” between the world’s largest economies will be avoided. Under the conditions of economic instability, no one needs a trade confrontation.