Oil prices rise on supply disruption jitters as geopolitical tensions grow

Oil gains more than $1/bbl after Saudi price hike


After Saudi Arabia, the largest exporter, raised the price of its crude oil sold to Asia and the United States, oil prices rose by more than $1 per barrel on Monday, and indirect negotiations between the United States and Iran on the resumption of the nuclear agreement appeared to be deadlocked.

As of 0033 GMT, February Brent crude oil futures rose by US$1.69, or 2.4%, to US$71.57 per barrel, while the US January West Texas Intermediate crude oil futures price was US$67.92 per barrel, up 1.66 USD, or 2.5%.

On Sunday, the official January price of all crude oil grades that Saudi Arabia will sell to Asia and the United States increased by 80 cents from the previous month.

Although OPEC and its allies including Russia decided last week to continue to increase the supply of 400,000 barrels per day in January, price increases are still being implemented.

After the indirect negotiations between the United States and Iran to rescue the 2015 Iran nuclear deal broke down last week, the prospect of increased Iranian oil exports weakened, which also boosted oil prices. European officials on Friday expressed disappointment at the comprehensive demands of Iran’s new tough government. The talks are expected to resume in the middle of this week.

Fearing that the new coronavirus variant Omicron may affect global economic growth and fuel demand, the two benchmarks rebounded after falling for the sixth consecutive week last week, the first time since November 2018.

As another sign of the turmoil caused by the ever-changing pandemic, the head of the International Monetary Fund said that due to the new variant, the global bank may lower its global economic growth expectations.

As of Sunday, Omicron has expanded to approximately one-third of the states in the United States.

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