Moscow. On 4 January. Oil prices are rising during trading on Monday after Saudi Arabia broke off diplomatic relations with Iran because of the attack on the Embassy in Tehran, reports Bloomberg.
The cost of the February futures for Brent crude on London’s ICE Futures exchange at 9:25 Moscow time has risen on $0,67 (1,80%) to $37,95 per barrel.
Futures price for WTI crude oil for February in electronic trading on the new York Mercantile exchange (NYMEX) has increased by this time for $0,61 (1,65%) – to $37,65 per barrel.
“Maybe the market sees what is happening as just another step in a potentially long-term escalations in key oil-producing countries – Saudi Arabia and Iran. Most likely, pictures will be embedded a small risk premium. Immediate threat to oil production there,” said CMC Markets chief analyst RIC Spooner.
The break of diplomatic relations
According to a statement on Sunday, Saudi foreign Minister Adel al-Jubara, all Iranian diplomats must leave Saudi Arabia within 48 hours.
As the causes of the gap, the foreign Minister of Saudi Arabia called the attack a crowd of demonstrators at the Saudi Embassy in Tehran, said “bi-Bi-si”.
Previously Saudi Arabia had executed 47 people sentenced on charges of terrorism, among which was a famous Shiite preacher Nimr al-Nimr.
On Saturday, Iran’s foreign Ministry summoned chargé d’affaires of Saudi Arabia to Tehran to Lodge a protest in connection with the execution of Nimr an-Nimr.
In Tehran, protesters attacked the Saudi Embassy, pelted the building with Molotov cocktails. Police had to use tear gas to oust protesters from the Embassy. According to Iranian media, was arrested 40 people.
According to the International energy Agency (IEA), the share of Middle East countries account for around 30% of world production of oil. Saudi Arabia ranks first in oil production among OPEC countries, Iran is the fifth. Almost all of the middle East conflict, Tehran and Riyadh hold opposing points of view.
The fall in oil prices in 2014-2015 was the most significant in the history of observations on the background of excess supply of energy. Brent oil fell last year to 35% after the crash at 48% a year earlier, WTI completed in 2015 with a price around 30% lower than at its beginning.