Oil prices whipsaw as traders digest attack on Saudi oil terminal

saudi aramco plant
A view shows Saudi Aramco’s Wasit Gas Plant, Saudi Arabia in 2014.

  • Brent oil, the international benchmark, surged above $70 for the first time in more than a year. 
  • Saudi Arabia said it intercepted drone and missile attacks aimed against its facilities. 
  • Yemen’s Houthi rebels reportedly claimed they hit the facilities they targeted in Saudi Arabia.
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Oil prices shot up past $70 for the first time in more than a year after key facilities in Saudi Arabia came under a missile and drone attack Sunday.

Saudi Arabia said the attacks were intercepted, with an attempted drone strike aimed at one of the petroleum tank farms in the Ras Tanura port while a ballistic missile targeted Saudi Aramco facilities in Dharan, according to the Saudi Press Agency

Brent oil, oil’s international benchmark, climbed to an intraday high of $71.38 per barrel as it packed on more than 2% from Friday’s settlement. Brent oil hadn’t traded above $70 since January 2020. The price on Monday eventually turned lower, losing 0.2% at $69.24.

The West Texas Intermediate continuous oil contract reached as high as $67.26 before pulling back. It was off $0.02 at $65.43.

Yemen’s Houthi rebels on Sunday claimed they hit facilities in Ras Tanura, according to the Washington Post. A coalition led by Saudi Arabia has been fighting against the rebels backed by Iran since 2015.

“The Ministry of Defense will undertake all necessary, deterrent measures to safeguard its national assets in a manner that preserves the security of global energy,” said Brigadier General Turki Al-Malki of Saudi Arabia’s defense ministry in a statement.

Oil prices climbed last week after the Organization of the Petroleum Exporting Countries and its allies agreed to keep production cuts intact through April, a decision made as a recovery in the market is still taking shape while the COVID-19 pandemic persists.

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