Industry and Energy

Home page

Industry and Energy

Oil rises as Saudis cut ties with Iran after embassy attacked

04 January 2016 07:31 (UTC +04:00)

Brent for February settlement increased as much as $1.22, or 3.3 percent, to $38.50 a barrel on the London-based ICE Futures Europe exchange. Prices slid 35 percent last year for a third annual drop. The European benchmark crude was at a premium of 37 cents to WTI, Bloomberg reported.

“It may be seen by the market as an incremental step in a possible longer-term escalation of problems in the core oil-producing nations of Saudi Arabia and Iran,” said Ric Spooner, a chief analyst at CMC Markets in Sydney. “Geopolitical concerns keep ratcheting up, especially with the latest flare up between Saudi Arabia and Iran,” Robin Mills, an analyst at Manaar Energy Consulting in Dubai, said by phone from the U.K. on Sunday.

Saudi Arabia and Iran, respectively OPEC’s first- and fifth-ranked producers, are on opposite sides of Middle East conflicts from Syria to Yemen.