Oil prices jump on rift between Saudi Arabia and Iran

Posted On 04 Jan 2016

Oil prices jumped as tensions across the Middle East have ratcheted up after Saudi Arabia severed ties with Iran on Sunday, following the execution of a Shia cleric by Riyadh and the consequent storming of the Saudi embassy in Tehran.

Saudi Arabia executed 47 people on Saturday, including Sheikh Nimr al-Nimr for planning and carrying out terrorist attacks.
The riots at Riyadh’s embassy in Tehran and consequent diplomatic spat have exacerbated already-poor relations, with each country already accusing each other of fanning sectarian wars between Muslims in Iraq and Syria.

The news sent oil prices sharply higher in the first trading day of 2016 on to the prospect of supply disruption.

The benchmark U.S. light sweet crude (WTI) was up 1.7 percent at $37.69 a barrel mid-morning in Asia, after jumping as much as 3.4 percent.

Meanwhile Brent crude was up 1.9 percent at $37.99 a barrel after spiking 2.3 percent in the last session.

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