Oil Prices Surge after Saudi Air Strikes in Yemen
TEHRAN (Tasnim) - Brent crude oil shot up nearly 6 percent on Thursday after Saudi Arabia and its Persian Gulf Arab allies began a military operation in Yemen, but the benchmark later came off its high near $60 as importers saw no immediate threat to supplies.
The strike against Houthi fighters, who have driven the resigned president from Yemen's capital Sana'a, could stoke concerns about the security of Middle East oil shipments.
Oil prices jumped as traders and importers said they were worried the Saudi attack was a sign that fighting in the oil-rich Middle East was spreading and out of control.
Brent futures LCOc1 rose as high as $59.71 a barrel, up almost 6 percent since their last settlement, before dipping back to $57.96 a barrel at 0638 GMT, though still up $1.48.
US crude CLc1 was up $1.76 at $50.97 a barrel.
Beyond oil, the Middle East is also the world's biggest exporter of liquefied natural gas (LNG), from Qatar and also Yemen, but importers said they were not immediately worried.
"Gas supply from Yemen has no disruption so far. We are not concerned given the supply surplus and weak demand currently," said Lee Sang-wook Korea Gas Corp.
Like oil, LNG prices have fallen by more than half in the last 10 months as surging output has been met with slowing economic growth, especially in Asia, Reuters reported.
With the global crude glut built up from US shale oil and strong output from producers such as Russia, there is little immediate worry about any shortages developing.
"Just because Saudi and others conducted air strikes doesn't mean the oil market becomes suddenly tight," said Masaki Suematsu, manager of the energy team at brokerage Newedge Japan in Tokyo, although he cautioned that the conflict could spiral further beyond the airstrikes.