SINGAPORE: Brent crude oil rose for sixth day on Tuesday, passing $75 a barrel, on expectations that supplies will tighten because fuel is rising at the same time the US may impose sanctions against Iran and OPEC-led output cuts remain in place.
Brent crude oil futures climbed to as high as $75.20 a barrel in early trading on Tuesday, the highest since Nov. 27, 2014. Brent was still at $75 a barrel at 0311 GMT up 29 cents, or 0.4 percent, from its last close.
Brent’s six-day rising streak is the most since a similar string of gains in December and it is up by more than 20 percent from its 2018 low in February.
US West Texas Intermediate (WTI) crude futures were at $68.98 a barrel, up 34 cents, or 0.5 percent from their last settlement. On Thursday, WTI rose to as high as $69.56, the most since Nov. 28, 2014.
Markets have been lifted by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) which were introduced in 2017 with the aim of propping up the market.
The potential of renewed US sanctions against Iran is also pushing prices higher.
Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA said new sanctions against Tehran “could push oil prices up as much as $5 per barrel.”
The US has until May 12 to decide whether it will leave the Iran nuclear deal and re-impose sanctions against OPEC’s third-largest producer, which would further tighten global supplies.
“Crude prices are now sitting at the highest levels in three years, reflecting ongoing concerns around geopolitical tensions in the Middle East, which is the source of nearly half of the world’s oil supply,” ANZ bank said.
“Oil strength is coming from Saudi Arabia’s recent commitment to get oil back up to between $70 to $80 per barrel as well as inventory levels that are back in the normal range,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.
OPEC’s supply curtailments and the threat of new sanctions are occurring just as demand in Asia, the world’s biggest oil consuming region, has risen to a record as new and expanded refineries start up from China to Vietnam.
One of the few factors that has limited oil prices from surging even more is US production, which has shot up by more than a quarter since mid-2016 to over 10.54 million barrels per day (bpd), taking it past Saudi Arabia’s output of around 10 million bpd.
As a result of its rising output, US crude is increasingly appearing on global markets, from Europe to Asia, undermining OPEC’s efforts to tighten the market.
Brent crude oil rises for a sixth day as supplies tighten amid strong demand
Brent crude oil rises for a sixth day as supplies tighten amid strong demand
- US West Texas Intermediate crude futures were at $68.98 a barrel, up 34 cents
- The potential of renewed US sanctions against Iran is pushing prices higher
Boeing has 400 defense partners in Saudi Arabia
RIYADH: Boeing Saudi Arabia President Asaad Al-Jomai said the company has more than 400 defense partners in Saudi Arabia and works closely with local manufacturers such as Saudi Arabian Military Industries, or SAMI, which is leading the Kingdom’s defense localization mission.
He added: “The partnership is also active through academic and technical cooperation as Boeing is a founding partner of Al-Faisal University and has partnerships with King Abdullah University of Science and Technology, or KAUST, and King Abdulaziz City for Science and Technology.”
Localization of industry is a key objective for companies operating in Saudi Arabia, Al-Jomai said, adding that partnerships with firms such as SAMI support the Kingdom’s goal of localizing more than 50 percent of military spending by 2030. Boeing considers itself a central partner in localization and technology transfer.
According to Al-Jomai, Boeing’s relationship with Saudi Arabia spans more than 81 years. The company currently employs more than 90 people at its Saudi headquarters and has delivered more than 170 commercial aircraft in recent years.
Defense contracts dominate operations
Boeing’s existing contracts include maintenance and technical support for advanced defense systems, most notably F-15 fighter jets, with Saudi Arabia the largest operator of the aircraft outside the US.
He added that these contracts also cover Apache attack helicopters and AH-6i aircraft, known as the “Little Bird.”
Al-Jomai said that although support agreements cover both commercial and defense sectors, defense operations currently dominate in Saudi Arabia due to the expansion in military spending. He added that long global delivery cycles for commercial aircraft have shifted technical support efforts toward servicing defense fleets already operating in the Kingdom.
According to Boeing’s website, Boeing Defense, Space & Security’s relationship with the Royal Saudi Air Force began in 1978 when Saudi Arabia selected its first fleet of F-15C/D aircraft, forming the backbone of the Kingdom’s air defense.
The fleet expanded significantly in December 2011 when Saudi Arabia and the US signed a military sales agreement — the largest in US history at the time — covering F-15SA fighter jets, AH-64E Apache attack helicopters and AH-6 light armed reconnaissance helicopters.
