Oil prices returned to growth due to the rupture of diplomatic relations Riyadh and Tehran

Moscow. On 4 January. Oil prices resumed growth during the volatile session on Monday, Bloomberg reported.

The cost of the February futures for Brent crude on London’s ICE Futures exchange by 14:55 Moscow time rose by 53 cents (1,42%) – to $37,81 per barrel.

Futures price for WTI crude oil for February in electronic trading on the new York Mercantile exchange (NYMEX) increased to a specified time by $0.19 (0.51 per cent) to $37,23 per barrel.

Price increase helps the news of the rupture of diplomatic relations between Iran and Saudi Arabia. The authorities took this decision in response to the defeat of the Saudi Embassy in Tehran after the execution of Riyadh’s influential Shiite preacher Nimr al-Nimr. Its diplomatic representatives from Iran also withdrew Bahrain and Sudan.

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 conflict between Iran and Saudi Arabia increases the risk to oil supplies, which have been in a long time,’ says Global Risk Management analyst Michael Poulsen. – However, the level of reserves to market is still more important than geopolitics”.

The increase in oil prices is restrained due to the collapse of the Chinese stock market. The index of “blue chips” of the Shanghai and Shenzhen 300 CSI on Monday lost 7%, which regulators have used a new mechanism and suspended trading until the end of the day.