Business a.m
Oil prices jumped by more than $1 a barrel on Wednesday after reports of a disruption to Libya’s largest oilfield added to worries about supply disruptions following the attack on a tanker off the coast of Yemen. The reported shutdown of the El Sharara oilfield in Libya, one of the country’s most productive fields, came as tensions in the Red Sea region remained high following the recent attack on a tanker.
According to data from Refinitiv, the price of Brent crude oil for February delivery rose by $1.34, or 1.8 per cent, to $77.23 a barrel, while U.S. West Texas Intermediate (WTI) crude futures for February delivery gained $1.29, or 1.8 per cent, to $71.67 a barrel.
According to Reuters, two engineers working at the Sharara oilfield said that protests have forced a partial reduction in production, causing a loss of between 80,000 and 150,000 barrels per day. The engineers, who asked not to be identified, also noted that the protests were triggered by a wage dispute. Meanwhile, Viktor Katona, an analyst from energy research firm Kpler, said that the disruption is likely to be short-lived and will result in a price increase for Brent crude.
Oil prices had previously rallied by as much as $2 earlier in the week, following attacks on commercial vessels by Houthi fighters in the Red Sea. The group, which is backed by Iran, said it had targeted a container ship bound for Israel on Wednesday, after the U.S. Central Command (CENTCOM) reported that two anti-ship ballistic missiles had been launched by Houthis in the southern Red Sea on Tuesday. The attacks have raised concerns about disruptions to oil transportation and trade flows in the region, as the Houthis have previously threatened to block the Strait of Hormuz, a major oil shipping lane.
Oil windfall expectations from the Middle East crisis