Oil climbed past $50 a barrel after another tanker explosion in the Middle East raised concerns over the region’s stability, and as the first Covid-19 vaccine was poised to be distributed across the U.S. Futures rose as much as 1.7% in London. The explosion, at the Saudi Arabian port of Jeddah, comes three weeks after an oil tanker was damaged in a possible attack at the Saudi terminal of Shuqaiq. While the attack is small, it symbolizes a wider geopolitical risk that could impact energy in the region.

Oil climbs after a tanker explosion near a Saudi port

Oil is up more than 30% since the end of October amid vaccine breakthroughs and an OPEC+ compromise deal on production. Iran, meanwhile, plans to almost double output in the next year in anticipation of a loosening of sanctions after Joe Biden becomes president.

“While risk assets, including oil, are looking to position for a recovery trade with the deployment of a Covid-19 vaccine, the explosion of a tanker off Jeddah is reminder that condition in Gulf are subject to geopolitical risk,” said Harry Tchilinguirian, oil strategist at BNP Paribas.

PRICES
  • Brent for February settlement advanced 0.9% to $50.44 a barrel at 10:18 a.m. London time
  • West Texas Intermediate for January delivery rose 45 cents to $47.02