Crude oil prices hit seven-year high in the wake of drone strikes in the UAE

Dubai / London – Crude oil prices have increased due to a drone strike near the United Arab Emirates (UAE) fuel depot. Crude oil prices have jumped above $87 per barrel in the international market, the highest level in seven years. Earlier, in October 2014, crude oil prices were recorded at more than $87 per barrel. Fuel demand has been rising in the last few months and crude oil prices have been rising due to lack of supply.

On Monday, Yemen’s Houthi rebels carried out drone strikes in the UAE capital, Abu Dhabi. Three oil tankers were targeted in the attack. The tankers were located close to the fuel depots of Abu Dhabi National Oil Company, the UAE’s leading fuel company. Although the drone strikes did not cause any damage to the UAE’s fuel reserves, they had strong repercussions in the international market.

On Tuesday, crude oil prices jumped one per cent in fuel market transactions. The rise sent crude oil prices to $87 a barrel. In London, crude oil was trading at $87.36 a barrel. US crude oil prices rose 1.5 per cent. Rates in the US have gone above $85 per barrel. This rate is the highest rate since October 2014 and has become the new high in seven years.

With fuel supply problems persisting in the fuel market, new geopolitical tensions are mounting, with ANZ Research hinting that fuel prices could rise further in the coming days. The financial institution, CMC Markets, has said that the demand for crude oil has started increasing again in the international market. Moreover, it is expected the demand will exceed the supply this year. Verisk Maplecroft, a consulting firm, has warned that the threat to fuel producers in the Middle East, including the UAE, has been highlighted after Monday’s attack. The situation could become more complicated. The UAE is the third-largest producer of fuel in the OPEC group and the seventh-largest producer globally. UAE produces 4 million barrels of crude oil every day. Last year, OPEC decided to increase crude oil production by 400,000 barrels. However, many member countries have failed to meet their targets, leading to international crude oil shortages.