The sudden spike in oil prices following Thursday's report of a pipeline explosion in Saudi Arabia highlights how nervous traders are about turmoil in the region—and the long-running distrust between Saudi Arabia and Iran.
Iran’s state-run Press TV said an explosion in the town of Awamia “destroyed the pipelines feeding one of the most important oil hubs in the world.” The report sent oil prices soaring and US stocks lower.
Oil officials told CNBC shortly thereafter that the reports were false, causing oil prices to pare their gains and stocks to recoup some of their losses.
On Friday, oil prices continued to fall back, with Brent crude off nearly two percent and US crude down well over two percent.
The Saudi denial offered little consolation to those fretting about rising oil prices. There are several examples of authorities downplaying domestic unrest since the uprisings spread across the region last year.
Indeed, unresolved tensions remain in that particular part of the Kingdom. A lack of reliable information and multiple corroborating sources, often due to the difficulty of journalists obtaining access, complicates the matter further.Page 1 of 3 | Next Page