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May 13, 2019updated 14 May 2019 10:42am

Oil prices increase as tanker attacks in Middle East increase supply concerns

Global oil prices increased due to supply concerns after reports of multiple attacks on oil tankers in the Middle East.

Global oil prices increased due to supply concerns after reports of multiple attacks on oil tankers in the Middle East.

Brent crude futures prices grew by $1.09 to $71.71 a barrel, while US West Texas Intermediate (WTI) futures gained 79 cents to trade at $62.45 per barrel, Reuters reported.

Saudi Arabia said that two of its oil tankers have been targeted by a ‘sabotage attack’ near the United Arab Emirates (UAE) coast. The attack was described as an attempt to disrupt global crude supplies.

Separately, the UAE also announced that four of its commercial vessels were attacked in its territorial waters in the Gulf of Oman near its Fujairah emirate. However additional details on the attacks were not provided, including the nature of the perpetrators.

“Reports on Sunday of explosions in Fujairah are likely to add further impetus to a potentially growing risk premium in the region.”

In the OPEC cartel Saudi and the UAE are the largest and third-largest producers, respectively.

JBC Energy was quoted by Reuters as saying: “Reports on Sunday of explosions in Fujairah are likely to add further impetus to a potentially growing risk premium in the region, with initial reports suggesting oil tankers specifically were targeted in an apparent sabotage.”

The incidents of tanker attacks further increased supply concerns in the oil market, which is already tightened due to OPEC-led output cuts and sanctions against Iran and Venezuela. The market is also tensed over growing trade tensions between the US and China, as well as poor global economic growth prospects.

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