Oil up on Saudi, regional turmoil

Crude prices reached two-year highs on Monday after the arrests of high-ranking Saudi officials over the weekend and spiraling tensions between Iran and Saudi Arabia in Yemen, Lebanon and throughout the region.

At 1:17 pm in London, Brent crude futures for January 2018 delivery were up about 0.8% since Friday’s close, at USD 62.55 per barrel.

An anti-corruption probe many analysts see as an attempt by Saudi Crown Prince Mohammed bin Salman to consolidate power appeared to widen on Monday, Reuters reported. Dozens of high-ranking Saudi officials and businessmen including 11 princes and four ministers have been detained since the weekend.

Meanwhile, Saudi-led forces imposed a full blockade on Yemen and warned Iran that a rebel ballistic missile shot down over Riyadh on Sunday could be “considered as an act of war” committed by Tehran, the Associated Press reported.

The developments came as Lebanon’s Sunni Muslim Prime Minister Saad Hariri resigned and escaped to Saudi Arabia on Saturday, blaming Iran for an alleged plot to assassinate him. Pro-Iranian militant group Hezbollah and the regime of Syrian President Bashar Assad, an ally of Iran, are widely believed to have masterminded a 2005 bombing that claimed the life of Hariri’s father, former Lebanese Prime Minister Rafic Hariri.

“Synchronous global economic growth and new supply disruptions are creating the most constructive oil price environment since […] 2014,” Barclays bank analysts told Reuters.