Oil spikes to US$64 a barrel

09-Aug-05

USA has shut all its missions in Saudi Arabia in response to fears of an attack, sending oil prices sky rocketing to new highs. Saudi Arabia, pumping 10m bpd of crude is the world's largest crude exporter. The Kingdom is critical to oil supplies, since it supplies one in every 7 barrels consumed globally. Washington has shut its diplomatic missions in Riyadh and elsewhere in the country for two days because of a security threat, while Britain and Australia warned of possible attacks by militants in the country. Reports that Iran, Opec's second largest oil exporter, had restarted work on its nuclear programme, also added to the market anxiety. US light crude futures on the New York Mercantile Exchange spiked to a new all-time high of US$64 a barrel, In London, Brent crude hit US$62.76 for the first time. Though oil prices are at a record, they are still below the US$80 a barrel in real terms that they hit in 1979.