Benchmark oil prices climbed to their highest since 2014 on Tuesday as possible supply disruption after attacks in the Mideast Gulf added to an already tight supply outlook. Brent crude futures rose by $0.74, or 0.9%, to $87.22 a barrel at 1446 GMT. U.S. West Texas Intermediate (WTI) crude futures jumped $1.07, or 1.3%, to $84.89. Trade on Monday was subdued because of a U.S. public holiday.
After Yemen’s Houthi group attacked the United Arab Emirates, supply outlook has grown significantly as tensions between Saudi Arabian-led coalition and Iran-aligned group continues.
Furthermore, the Houthi movement has already warned the United Arab Emirates (UAE) that it could target more infrastructure and facilities, with its last missile strike killing three people.
Abu Dhabi National Oil Company (ADNOC), has stated it has activated business continuity plan after the Mussafah depot incident, in order to ensure regular oil supply locally and across the globe.
Nonetheless, the geopolitical crisis between Ukraine and Russia, an OPEC+ member, has further pressured oil prices resulting to its increase.
Analysts from Goldman Sachs has said they expect oil inventories in OECD countries to fall to its lowest figure by summer and Brent oil prices rising to $100 later this year.
In addition, some producers within the Organization of the Petroleum Exporting Countries (OPEC) are struggling to pump at their allowed capacities under an agreement with Russia and allies to add 400,000 barrels per day each month.