Oil prices jump due to drone attacks

Abu Dhabi: Oil prices jumped for the second consecutive day as a result of drone attacks on Saudi Aramco’s pumping stations.

The latest incident follows attacks on two oil tankers from Saudi Arabia near the Strait of Hormuz, off the coast of United Aram Emirates on Sunday.

Brent, the global benchmark was up by 1.50 per cent at $71.28 per barrel at 4:20pm UAE time. West Texas Intermediate was up by 1.33 per cent at $61.85 per barrel on Tuesday.

“Markets are jittery as the spate of recent attacks including on the oil tankers in the Arabian Gulf seem to be aimed at disrupting the supply chain. With rising tensions between Iran and the US, and with significant naval build up in the region, markets are sensitive to news and can be tipped by the smallest signs of a conflict,” said Mihir Kapadia, the CEO of Sun Global Investments.

In a statement on Tuesday, Saudi Aramco said it responded to a fire at East West Pipeline Pump station 8 which was caused by a sabotage incident using armed drones which targeted pump stations 8 and 9.

“As a precautionary measure, the company temporarily shut down the pipeline, and contained the fire which caused minor damage to pump station 8.”

Saudi Aramco confirmed that no injuries or fatalities have been reported and oil and gas supplies not affected.

The pipeline transports Saudi oil from the Eastern Province to Yanbu port.

Saudi Arabia’s energy minister Khalid Al-Falih also said in a separate statement on Saudi Press Agency,

that the country’s oil production has not been interrupted following the incident. This act of terrorism and sabotage in addition to recent acts in the Arabian Gulf do not only target the Kingdom but also the security of world oil supplies and the global economy, he added.

The latest incidents come as the United States administration terminates Iran sanction waivers granted to eight countries that import oil from the Islamic Republic to pressurise the country to halt its nuclear enrichment programme.