Crude climbs to highest since 2014 after attack on Abu Dhabi oil facilities

'The damage to the UAE oil facilities in Abu Dhabi is not significant in itself, but it raises the question of even more supply disruptions in the region in 2022.'

Oil prices have climbed to their highest since 2014 as possible supply disruption after attacks in the Mideast Gulf added to an already tight supply outlook.

The price of a barrel of Brent crude rose almost 1% to $87.25 (€77.05) as supply concerns mounted this week after Yemen's Houthi group attacked the United Arab Emirates (UAE), escalating hostilities between the Iran-aligned group and a Saudi Arabian-led coalition. 

After launching drone and missile strikes that set off explosions in fuel trucks and killed three people, the Houthi movement warned it could target more facilities, while the UAE said it reserved the right to "respond to these terrorist attacks".

"The damage to the UAE oil facilities in Abu Dhabi is not significant in itself, but it raises the question of even more supply disruptions in the region in 2022," said Rystad Energy's senior oil markets analyst Louise Dickson.

"The attack raises the geopolitical risk in the region and may signal the Iran-US nuclear deal is off the table for the foreseeable future, meaning Iranian oil barrels are off the market, boosting demand for similar grade crude originating elsewhere," Ms Dickson added. 

Opec stuck to its forecast for robust growth in world oil demand in 2022 despite the Omicron variant and expected interest rate hikes, predicting the oil market would remain well supported. 

Meanwhile, the wholesale price of European gas for delivery next month fell, but prices remain at elevated levels through the summer, indicating no quick end to the energy supply crunch.