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Brent crude breaks $70 after Saudi Arabia’s oil facilities attacked by Yemen’s Houthis

International benchmark Brent crude futures jumped above $70 for the first time in more than a year on Monday, before giving back those gains to trade in the red.

The surge in prices came after Saudi Arabia said its oil facilities were targeted by missiles and drones on Sunday. A Houthi military spokesman claimed responsibility for the attacks.

Brent traded as high at $71.38 per barrel, the highest level since Jan. 2020, while U.S. crude futures rose to $67.98 per barrel, a level not seen since Oct. 2018. However, at 12:30 p.m. on Wall Street both contracts were in the red.

Brent shed 97 cents, or 1.37%, to trade at $68.41 per barrel, while WTI was 93 cents, or 1.41%, lower at $65.16 per barrel.

Saudi Arabia’s ministry of energy said a petroleum tank farm at one of the world’s largest oil shipping ports was attacked by a drone and a ballistic missile targeted Saudi Aramco facilities, according to state news agency SPA.

Such acts of sabotage do not only target the Kingdom of Saudi Arabia, but also the security and stability of energy supplies to the world, and therefore, the global economy.

A spokesman said neither attack caused any injury or loss of life or property, but shrapnel from the intercepted missile fell near residential areas in the city of Dhahran, SPA reported.

“Such acts of sabotage do not only target the Kingdom of Saudi Arabia, but also the security and stability of energy supplies to the world, and therefore, the global economy,” the ministry said via state media. “They affect the security of petroleum exports, freedom of world trade, and maritime traffic.”

Yahya Sare’e, a spokesman for Yemen’s Houthis, said it carried out a “broad joint offensive operation” involving 14 drones and eight ballistic missiles.

He said on Twitter that other military sites were also targeted with four drones and seven ballistic missiles, adding that “the hit was precise.”

“We promise the #Saudi regime painful operations as long as it continues its aggression and blockade on our country,” he said in another post.

A Saudi-led coalition intervened in Yemen’s civil war in 2015 and has continued to fight against the Houthis in what is seen as a proxy war with Iran.

The Houthis have reportedly stepped up attacks on Saudi Arabia in recent weeks.

The Biden administration last month said it would remove the Iran-backed Houthi rebels in Yemen from the Foreign Terrorist Organization and Specially Designated Global Terrorist lists, according to NBC News.

John Driscoll, director at JTD Energy Services, told CNBC that the primary effect of the attacks is psychological.

“They serve as a reminder that the Mideast is vulnerable and rife with tensions and rivalries that could overheat at any time,” he said in an email.

However, he said the run up in prices could be short lived, noting that the Saudis said there was no significant damage to infrastructure.

Driscoll also said the timing is “noteworthy,” given that the U.S. took military action against Iran and Iraq targets last week.

“One senses [that] lines are being drawn in the sand,” he said.

Previous articleJonathan is a man of peace, says Uzodimma…Receives ex- president in Owerri Governor Hope Uzodimma of Imo State has said former President Goodluck Jonathan is a man of peace and that prosterity will be kind to him. Governor Uzodimma spoke on Monday when he received Dr. Jonathan and his team at the Sam Mbakwe Executive Chambers shortly before they went to commission a private health facility – Aihwa Hope Centre – built by an indigene of the state, Rev. Kenny Udunka in Owerri. Governor Uzodimma appreciated the gesture of calling on him and described Dr. Jonathan as a peaceful man and a beacon of good governance. He added that the former President’s visit to Imo State though not on a working visit shows his love for the people, the state and a partner in progress. He further assured him of the readiness of the state to accord him warm reception anytime and appealed that from time to time the former President should visit the state and access the level of development going on by his administration. In his reaction, Dr. Jonathan expressed happiness over the sudden warm reception and eulogized the Governor for his commitment towards changing the face of Imo state for the better. He charged the governor to remain unwavering in his determination towards the development of the state and encouraged politicians in the state to eschew politics of hate. He also urged the governor’s appointees to help him in making the state a better place for all. At the commissioning ceremony of Aihwa Integrated Clinic along Sam Mbakwe International Airport, Owerri, both Governor Uzodimma and Dr Jonathan harped on the need for a health facility in the state in particular and the country in general that will put a stop to incessant medical tourism embarked upon by Nigerians. They lauded Rev. Fr Udumka for the foresight in attracting the facility to Imo State and urged the citizens to patronize the centre. Governor Uzodimma specifically pledged government support by way of creating an enabling environment that will enable the centre function optimally. Earlier in his welcoming address, Rev. Fr Udumka thanked the governor as Chief Host and Dr Jonathan as Special Guest of Honour, as well as other special dignitaries, including some first class traditional rulers from different parts of the country who graced the occasion.
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