Oil hits seven-year high as attack on UAE rattles regional tensions
The United Arab Emirates has vowed to retaliate against Houthi militants for a deadly attack on its capital Abu Dhabi on Monday that killed three people, as fresh tensions in the region helped push oil prices to their highest level in seven years.
“We condemn the Houthi militia’s targeting of civilian areas and facilities on UAE soil today,” the UAE’s Ministry of Foreign Affairs said in a statement following the attacks. “We reiterate that those responsible for this unlawful targeting of our country will be held accountable.”
The ministry added that the UAE “reserves the right to respond to these terrorist attacks and criminal escalation.”
International benchmark Brent crude futures rose 1.6% to $87.89 a barrel on Tuesday morning, while U.S. West Texas Intermediate futures jumped more than 2% to hit $85.56 during early morning deals. Both oil contracts notched their highest level since Oct. 2014 after a subdued trading day on Monday as U.S. markets were closed for a public holiday.
Energy analysts have attributed oil’s bullish run over recent weeks to signs of tightness in the market and persistent worries of a Russian incursion into Ukraine. The rising threat of a further deterioration in the Middle East’s security climate has provided further support to oil prices, prompting some to forecast a return to triple digits.
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Most significant attack on UAE
Yemen’s Houthi rebels claimed responsibility for the attack, which took place Monday morning and caused fires that resulted in three petroleum tanker explosions near state oil firm ADNOC’s storage facilities.
The fires began in the industrial area of Musaffah and at a construction site near Abu Dhabi International Airport in the UAE capital, Abu Dhabi police said in a statement, adding that they believe the attack was carried out by drones.
One Pakistani and two Indian nationals died as a result of the attacks. Six other people were injured and are being treated for mild and medium injuries, authorities said Monday.
Attacks by Houthi rebels — with whom the UAE has been at war in Yemen since a Saudi-led coalition began bombing the country in 2015 — have been common in Saudi Arabia, but this is the most significant strike by Houthis in the UAE, and is the first in the country since 2018.
The UAE largely withdrew from the Yemen conflict in 2019, but continues to support forces in the country fighting the Houthis, who receive financial and military backing from Iran.
The UAE is the third-largest oil producing member of OPEC, and ADNOC — the Abu Dhabi National Oil Company — controls oil operations in Abu Dhabi, home to the vast majority of the state’s crude. The UAE is the world’s seventh-biggest oil producer, pumping just over 4 million barrels per day.
