Oil Prices
Al Marzoqah tanker is seen off the Port of Fujairah, United Arab Emirates (Photo: Reuters)

Rising tensions in the Middle East have continually sent oil prices upward, with the latest attack now sending prices to record highs. Following a reported drone attack on two pumping stations in Saudi Arabia, oil prices jumped by as much as 1.4 percent in the United States. The attack, fortunately, resulted in no lives lost and a spill was reportedly averted just in time.

Shortly after news of the armed drone attack went public, Brent Crude jumped by more than 1.6 percent. The global benchmark normally wouldn't have reacted so much, but the gains in the sector have recently been muted by the recent breakdown in trade negotiations between the United States and China.

Attacks such as the one on Saudi Aramco's pumping stations do happen occasionally. The impact on global oil prices is normally not that substantial, as long as the supply continues. However, the recent attacks' effects were more pronounced this time around given the state of the global political and economic climate.  

The recent escalation of the US-China trade war and the plunge in global markets has drastically reduced the demand for crude oil. The rising tensions in the Middle East, partly due to the escalating rhetoric between Iran and the United States, have also made matters worse.

The US recently announced that it would be sending one of its aircraft carriers to the Middle East. The USS Abraham Lincoln has reportedly been dispatched and is en route as a response to the increasing threat from Iran and its allies.

Despite its economy spiraling down due to US sanctions on its oil exports, Iran has continued to be defiant. Reports have stated that it would be economic suicide for Iran to continue to provoke the United States. If there is a major clash between US forces and militias funded by Iran in the Middle East, things could get out of hand very quickly.

According to the Saudi Energy Ministry, the latest attack on two of its pumping stations had caused a fire. Rescue workers and responders were quickly dispatched and have since contained the flames.

The drone attack was preceded by yet another attack on two oil tankers just a day earlier. An unidentified group reportedly sabotaged two of its oil tankers off the coast of the United Arab Emirates.

The kingdom's state-owned oil company did not specify the nature of the "sabotage" on the two oil tankers nor did it reveal who it believed had carried out the attack. The UAE did report that there were no injuries during the incident.