Oil prices swing after strike on UAE nuclear power plant
Photo: Oil prices fluctuated following the attack on a nuclear power plant in the UAE (Getty Images)
Today, May 18, global oil prices continued to rise following an attack on a nuclear power plant in the United Arab Emirates. Traders fear a new escalation in the Middle East, Reuters reports.
Brent crude futures rose by $2.01, or 1.84%, to $111.27 per barrel, but did not reach the $112 mark, which was the highest level since May 5.
The price of US West Texas Intermediate crude stood at $107.75 per barrel, up $2.33, or 2.21%, after rising to $108.70, the highest level since April 30.
Both contracts rose by more than 7% last week as hopes for a peace deal with Iran that would end attacks and ship seizures in the Strait of Hormuz region have faded.
Drone attacks on the UAE and Saudi Arabia, as well as rhetoric from the US and Iran, have raised fears of an escalation of the conflict.
"One billion barrels of oil have been trapped behind the strait, and Friday’s rally, which took WTI $10 higher on the week, was also supported by belligerent US and Iranian rhetoric, as well as continued attacks on oil producers in the region and on commercial vessels," says PVM analyst Tamas Varga.
Vandana Hari, founder of oil market analysis firm Vanda Insights, adds that fears of renewed strikes on Iran have heightened supply concerns.
"Fears of renewed strikes on Iran have worsened supply fears ... the United States letting the Russia sanctions waiver lapse didn't help," she says.
Background
On May 17, a drone attack in the United Arab Emirates caused a fire at a generator at the Barakah nuclear power plant.
UAE authorities have not specified who launched the drone. Despite the incident, operations at the plant have not been suspended, and all four reactors continue to operate. They provide about 25% of the country’s electricity needs.
Ukrainian Foreign Minister Andrii Sybiha reacted to the incident, calling the attack completely unacceptable.
