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Oil Prices On The Rise Due to supply Constraints And Conflicts In Eastern Europe And Middle East.

Dubai, Monday 24 January 2022 -

On Monday, oil prices rose as tensions in Eastern Europe and the Middle East added to supply concerns in a market that was already tight due to the OPEC+ group's inability to fulfil its collective output target.

At 0555 GMT, international benchmark Brent crude was trading at $87.82 a barrel, up 0.85 percent from the previous session's close of $87.08 per barrel.

At the same time, the American benchmark West Texas Intermediate (WTI) was trading at $85.83 per barrel, up 0.81 percent from the previous session's close of $85.14 per barrel.

Continuing tensions between Ukraine and Russia prompted the US to order the "removal of eligible family members" of workers at its embassy in Kyiv, Ukraine, on Sunday.

According to the statement, the security situation surrounding "Ukraine's borders, in Russia-occupied Crimea, and Russia-controlled eastern Ukraine" is "unpredictable and can deteriorate with little warning," and there are allegations that Russia is considering "major military action against Ukraine."

Meanwhile, the Saudi-led coalition battling in Yemen reported two foreigners were hurt after Houthi militants fired a ballistic missile that landed in southern Saudi Arabia.

On Sunday, the Arab League asked for the Houthi rebel group in Yemen to be designated as a terrorist organization.

These geopolitical concerns, combined with OPEC producers' failure to achieve their monthly quotas under the OPEC+ deal with Russia and its allies to add 400,000 barrels per day, have weighed heavily on global oil markets.

Furthermore, the number of oil rigs in the United States decreased last week, adding to supply concerns during the winter heating season.

According to the most recent statistics issued on Friday by oilfield services company Baker Hughes, the number of oil rigs in the country declined by one to 491 for the week ending January 21 from 492 the previous week.

(Written and edited by: The Decision Maker – Middle East team)


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