Seoul: Oil resumed gains as tension between the US and Iran ratcheted up following the attacks on Saudi Arabia, while doubts remained over how fast the kingdom would be able restore lost output.
Brent crude surged as much as 1.9% after jumping 6.7% last week, the biggest weekly gain since January. Iran’s Foreign Minister Mohammad Javad Zarif refused to rule out war after the US sent more troops and weapons to Saudi Arabia, according to an interview with CBS. Washington on Friday slapped terror-related sanctions on the Islamic Republic’s central bank in retaliation to the strike on the kingdom’s energy infrastructure.
Saudi Arabia said Iran “unquestionably sponsored" the attacks, which knocked out about 5% of global supply and led to the biggest price spike on record. Aramco’s Chief Executive Officer Amin Nasser reiterated a commitment to restore output to pre-attack levels by the end of September, adding that the company hasn’t missed any customer shipments.
“Until Saudi Arabia fully restores production, oil prices will continue to be buoyed on concerns over increased geopolitical risks," said Will Yun, a commodities analyst at HI Investment Corp. in Seoul. “Still, it’s unlikely that we will see a war or military confrontation."
Rystad Energy and FGE are skeptical that Saudi Arabia will be able to meet its post-attack targets for restoring supply, while the Wall Street Journal reported repairs may take many months.
Brent crude for November rose 80 cents, or 1.2%, to $65.08 a barrel on the ICE Futures Europe Exchange as of 9:30 am in Singapore after gaining as much as $1.22 earlier. The contract closed 0.2% lower on Friday. The global benchmark crude traded at a $6.28 premium to West Texas Intermediate.
WTI for November delivery gained 72 cents, or 1.2%, at $58.81 a barrel on the New York Mercantile Exchange. The contract climbed 5.9% last week.
This story has been published from a wire agency feed without modifications to the text.