Oil prices continue to rise on geopolitical tensions after touching seven-year highs

Oil prices have risen for a fourth consecutive day after touching seven year highs earlier in the week, based on supply concerns and geopolitical troubles in the Middle East and Russia.

After both benchmarks climbed to highs not seen since October 2014 yesterday, reports of a pipeline outage between Iraq and Turkey have further added to concerns about an already tight supply outlook.

Brent crude futures rose 1% to US$88.38 a barrel at 05:43 GMT, adding to a 1.2% jump in the previous session. Meanwhile, US West Texas Intermediate futures climbed 1.2% to $86.46 a barrel, adding to a 1.9% gain on Tuesday.

Turkey’s state pipeline operator said the Kirkuk-Ceyhan pipeline would be operational ‘as soon as possible’ after it put out a blaze following an explosion that cut oil flow. The pipeline carries crude out of Iraq – the second largest OPEC producer, to the Turkish port of Ceyhan for export.

The supply disruption comes days after an attack by Yemen Houthi rebels on oil facilities in the United Arab Emirates, OPEC’s third largest producer. The prospect of military action by Russia – the world’s second largest oil producer – in Ukraine are also adding to supply fears.

“OPEC+ is falling short of hitting their production quotas and if geopolitical tensions continue to heat up, Brent crude might not need much of a push to get to $100 a barrel,” said OANDA analyst Edward Moya in a note.

OPEC on Tuesday maintained its forecast for robust growth in global oil demand in 2022 despite the Omicron COVID-19 variant and expected interest rate hikes.