Oil Prices Rise Amidst Tension In Middle East
Oil prices are high after on Monday after the tensions in the Middle East heightened following the announcement of Saudi Arabia that two of its oil tankers were sabotaged off the coast of the United Arab Emirates. The tension is timely to the escalating trade conflict of the United States and China.
The attack posed as a threat to shipping and the security if global oil supplies as it stoke fears about a global supply crisis. According to the report, the two ships sailing toward the Persian Gulf were attacked. The sabotage is expected to intensify the regional tensions in the Middle East which were sparked by the United States pressure on Iran over the Nuclear Deal.
The global benchmark, Brent crude futures, gained 1.9 percent on Monday at $71.75 per barrel. While the United States crude oil futures are up 1.6 percent at $62.48.
The gains were cut later after the United States and China trade war escalated. China retaliated the tariffs imposed by the United States on Chinese imports by raising the duties of imports amounting to $60 billion from the United States to 25 percent. China targeted agricultural products imported by the United States to China.
The state-run Saudi Press Agency reported that the vessels were approaching the Straight of Hormuts, the world's most important chokepoint for oil shipments when the tankers were damaged by the sabotage attack.
On Sunday, the United Arab Emirates foreign ministry reported that four commercial ships were attacked. The government officials said that two of the targeted tankers were registered in Saudi Arabia, one was flagged in the U.A.E., and the other in Norway. No claimed the responsibility for the attacks.
The Saudi Press Agency, a state-run news network, reported on Monday that one of the two Saudi vessels was on its way to being loaded with Saudi crude oil from the port of Ras Tanura, to be delivered to customers in the United States.
Last week, the United States deployed its aircraft carrier, bomber planes, and defense missiles to the region because of escalating conflict with Iran.
The United States imposed sanctions on Iranian oil after the Trump administration pulled out of the Iran Nuclear Deal. The Western nation lifted the waivers that allow the importers of Iranian oil to purchase. China and other nations condemned the sanctions imposed by the United States in Iran and in Venezuela. Iran recently announced that they plan to secure the Straight of Hormuts to block the passage of crude from other exporters.