04 Jan 2016

Arab-Iran Conflict Drives Up Oil Prices

Saudi Arabia on Sunday (03/01/2016) severed diplomatic relations with Iran, following an attack on the Saudi embassy in Teheran which was sparked by the execution of a Shia cleric.

At 0230 GMT, February West Texas Intermediate (WTI) crude futures were up 48 cents, or 1.30 percent, at $37.52 a US dollar.

February Brent crude futures, the global benchmark, rose 61 cents (1.64 percent) to $37.89 a US dollar.

"Oil has started the new year on a positive note, with Asian markets concerned that geopolitical tensions in the Middle East could threaten oil supplies," said Bernard Aw, market strategist at IG Markets in Singapore.

Saudi Arabia and Iran are the top and fifth-largest oil producers in the Organization of the Petroleum Exporting Countries (OPEC) respectively.