Brent hits seven-year highs amid heightened Middle East tensions

An alleged drone attack on a fuel depot in the UAE’s Abu Dhabi by the Yemeni Houthi group yesterday exploded trucks and killed three people.

Initial reports from Abu Dhabi police cnfirmed the explosions and casualties near ADNOC’s fuel depot in Mussafah.

ADNOC’s facility in Mussafah distributes oil products across the UAE and . The facility has 36 storage tanks with a combined capacity of 1.3 million cbm. It connects Abu Dhabi refineries and the Abu Dhabi International Airport via pipelines.

“Following the recent incident at Mussafah fuel depot, ADNOC has activated the necessary business continuity plans to ensure the reliable, uninterrupted supply of products to its local and international customers, while ensuring the safety of its employees,” ADNOC tweeted.

UAE’s Ministry of Foreign Affairs said it would retaliate the attacks, raising the threat of further destabilisation in the Middle East and supporting oil prices’ bull run.

Front-month ICE Brent hit seven-year high intraday highs of just above $88/bbl earlier today, and the market speculates whether Brent could hit triple digits.

Brent is also drawing support from expectations of a more short-lived demand impact from Omicron than initially expected, and from OPEC+ production target shortfalls, investment bank Goldman Sachs said this week.