International oil prices surged this week after Abu Dhabi National Oil Company (Adnoc) suffered a drone and missile attack on Monday that killed three workers, injured at least six more and a triggered explosions at the Mussafah fuel depot in Abu Dhabi.
Responsibility for the attack was attributed to the Yemen-based Houthi group that has been at war with a Saudi-led coalition.
Two days later, an explosion along a pipeline running from Iraq to the Turkish port of Ceyhan added to geopolitical concerns in the Middle East.
Turkey's state-owned pipeline operator Botas said on Tuesday it had cut oil flows at the Kirkuk-Ceyhan oil pipeline following an explosion near the south-eastern province of Kahramanmaras.
The drone terror attack in Abu Dhabi is likely to escalate the ongoing regional conflict between the Houthi group and a Saudi-led Gulf coalition, and could also hamper global efforts in the Middle East aimed at deescalating tensions between Iran and the US.
The UAE, a member of the Saudi-led coalition, has helped arm and trainelocal Yemeni forces that are fighting against the Houthis in Yemen.
A statement by UAE’s Foreign Affairs Ministry condemned the Houthi attack on Monday and said that “UAE reserves the right to respond to these terrorist attacks and criminal escalation, describing them as crimes committed in flagrant violation of international law.”
US Secretary of State Antony Blinken spoke to the Emirati Foreign Minister after the attacks.
“Secretary Blinken condemned the terrorist attacks today, which killed and wounded innocent civilians. The Houthis have claimed responsibility for this appalling attack,” a statement by the US Department of State said.
The Houthis have frequently launched cross-border missiles and had carried out drone attacks on Saudi Arabia, including a massive attack on the kingdom’s Abqaiq oil plant in 2019.
The Kirkuk-Ceyhan pipeline, on the other hand, carries crude oil from Iraq’s Kurdistan region for export from Turkey's port of Ceyhan.
Kurdish crude exports averaged 10 million barrels per month between October and December, Reuters reported, adding 5.2 million barrels have been loaded, so far, in January.
Geopolitical tensions involving Russia, the world’s second-largest oil producer, are adding to the supply concerns that have dictated market sentiment this week.
Brent crude spot prices were trading at seven-year highs on Wednesday at nearly $89 per barre amid perceptions of a tighter global supply outlook and rising geopolitical concerns in the Middle East.