Oil futures edged up on Wednesday as worries that rising tensions in the Middle East could hit global supplies overshadowed an unexpected build in U.S. crude inventories.
Oil prices have drawn support since Saudi Arabia said on Tuesday that armed drones struck two oil pumping stations, two days after the sabotage of oil tankers near the United Arab Emirates.
Given that nearly one-third of global oil production and nearly all of global spare capacity are in the Middle East, the oil market is very sensitive to any attacks on oil infrastructure in this region.
The attacks took place against a backdrop of U.S.-Iranian tension. Washington has been trying to cut Iran’s oil exports to zero with sanctions while beefing up the U.S. military presence in the Gulf.
Washington ordered the departure of non-emergency American employees from its diplomatic missions in Iraq on Wednesday in show of concern about threats from Iran-backed forces.
There could be a pretty serious conflict with Iran should they do something to U.S. forces in the region, and that would spike the price of oil.
Source: CNBC
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