Crude oil futures were higher during mid-morning trade in Asia Monday as tensions in the Middle East heightened following an attack on a Saudi airport on Sunday. At 11:25 am Singapore time (0325 GMT), ICE Brent August futures rose 26 cents/b (0.4%) from Friday’s settle at $65.46/b, while the front-month NYMEX August light sweet crude futures contract was up 41 cents/b (0.71%) at $57.84/b.
According to media reports, Yemen’s Houthi rebels had launched an attack on the Abha airport in southern Saudi Arabia on Sunday, killing one person and wounding seven others, quoting the Saudi-led coalition battling the group in Yemen. This latest attack comes at a time when tensions are already high in the region with US President Donald Trump looking to introduce fresh sanctions on Iran from Monday
“We are putting major additional sanctions on Iran on Monday,” Trump said in a tweet on Sunday. “I look forward to the day that… sanctions come off Iran, and they become a productive and prosperous nation again – The sooner the better!”
In a separate tweet later in the day, Trump said: “I never called the strike against Iran ?BACK,? as people are incorrectly reporting, I just stopped it from going forward at this time!” Trump was referring to his tweet from days earlier noting that he stopped US retaliatory attacks on three different sites after Iran shot down an unmanned drone in international waters on Monday “10 minutes before the strike.”
“The news that US President Trump aborted air strike on Iran raised concerns that the hostilities are escalating quickly and could develop into something more serious in the short term,” ANZ analysts said in a note on Monday. “Brent crude oil can be seen trading above $65 per barrel with the US set to impose new major sanctions on Iran on Monday that could risk further retaliation. Look to prices edging towards the $68.30/b level should further heightening of tensions be seen,” IG’s market strategist Pan Jingu said.
Meanwhile, Japanese refiners have started looking for crude sources from the Red Sea area, West Africa and the US that can avoid shipping cargoes through the Strait of Hormuz amid rising tensions in the region, Petroleum Association of Japan president Takashi Tsukioka said Friday.