The Commodities Feed: Attacks on Saudi Arabia fan oil supply worries

Energy – Kuwait pumping more than 2m b/d Oil prices remain well bid, with ICE Brent back above $110/bbl this morning following additional deadly attacks on Saudi Arabia. Drones struck the Shaybah oilfield and Dammam’s international airport. An oil processing plant was the target of the attack. Saudi Arabia’s energy ministry said production hasn’t been impacted. The escalation prompted the US State Department to order non-emergency US government personnel to leave the country. This will concern markets, suggesting little improvement in Middle East tensions, and possibly further escalation.

Despite the volatile environment, oil flows from the Persian Gulf are holding up. According to the CEO of Kuwait Petroleum Corp, Kuwait is exporting as much crude oil as before the war and producing more than 2m b/d. However, he admitted that the shipping of refined products is more of an issue. While oil flows have remained elevated, President Trump has expressed concern that oil prices remain elevated due to supply risks. This leaves plenty of uncertainty over the sustainability of flows. The sizeable risk premium currently embedded in prices is unlikely to fade until clear signs of de-escalation emerge and reassure investors that regional supply will remain uninterrupted.

This story was originally published by Hellenic Shipping News. Read the full story at Hellenic Shipping News →