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Oil hits seven-year high as Houthi attack on UAE rattles regional tensions


A storage unit of ADNOC, the oil-giant, was built near Abu Dhabi Airport, the capital of United Arab Emirates. It opened on January 17, 2022.

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DUBAI, United Arab Emirates — The United Arab Emirates has vowed to retaliate against Houthi militants for a deadly attack on its capital Abu Dhabi on Monday that killed three people, as fresh tensions in the region helped push oil prices to their highest level in seven years.

Following the attack, the UAE Ministry of Foreign Affairs issued a statement saying that it condemned the Houthi militia’s targeted of civilian areas on UAE soil. We reiterate our conviction that all those who perpetrated this illegal targeting of our nation will be held responsible.”

It was also stated that the UAE had the “right to respond to terrorist attacks and criminal escalated.”

International benchmark Brent crude futures rose 1.6% to $87.89 a barrel on Tuesday morning, while U.S. West Texas Intermediate futures jumped more than 2% to hit $85.56 during early morning deals. After a quiet trading day Monday, both oil contracts reached their highest levels since Oct. 2014. This was despite the fact that U.S. markets had been closed on Monday for a holiday.

Analysts have linked the bullish oil run in recent weeks to tightening market conditions and ongoing worries about a recession. Russian incursion into Ukraine. The rising threat of a further deterioration in the Middle East’s security climate has provided further support to oil prices, prompting some to forecast a return to triple digits.

UAE is under attack

The attack was claimed by Yemeni Houthi rebels. It took place on Monday morning. Three petroleum tanker explosions occurred near ADNOC storage facilities. Abu Dhabi police released a statement saying that fires broke out in Musaffah, an industrial area, and at Abu Dhabi International Airport.

Two Indian and one Pakistani nationals were killed in the attack. Authorities said that six other victims were also injured in the attack and they are currently being treated for moderate and severe injuries.

Attacks by Houthi rebels — which whom the UAE has been at war in Yemen since a Saudi-led coalition began bombing the country in 2015 — have been common in Saudi Arabia, but this is the most significant strike by Houthis in the UAE, and is the first in the country since 2018.

While the UAE withdrew almost entirely from the Yemen war in 2019, the UAE continues to support Yemeni forces against the Houthis. Iran also provides military and financial assistance.

The UAE is the third-largest oil producing member of OPEC, and ADNOC — the Abu Dhabi National Oil Company — controls oil operations in Abu Dhabi, home to the vast majority of the state’s crude. Just over 4 million barrels are produced per day by the UAE, which is seventh in world oil production.

— CNBC’s Sam Meredith contributed to this report