Pipeline attack sparks oil price rise By Javier Blas in London
Published: March 28 2008 02:00 | Last updated: March 28 2008 02:00
Crude oil prices surged to nearly $108 a barrel yesterday after saboteurs attacked an export pipeline in Iraq, sharply reducing exports from the south of the country, writes Javier Blas in London .
The resulting blaze was quickly extinguished and officials said efforts were under way to get shipments back to normal from Iraq's second city, Basra.
The sabotage of one of the two export pipelines in the south is expected to halt for several days about a third of the country's 1.6m barrels a day of crude oil exports.
The attack came as battles continued to rage around Basra between the Iraq army and radical Shia militiamen. The area around Basra accounts for 80 per cent of Iraqi oil output.
Nymex May West Texas Intermediate crude oil jumped to $108.22 a barrel in Asian trading.
In London, WTI closed at $107.65 a barrel, up $1.75, while later in New York it finished at $107.30. ICE May Brent rose 61 cents to $104.60 a barrel in London.
Paul Horsnell, head of commodities research at Barclays Capital, had previously given warning that Iraq could provide a potential trigger for further price rises.
"We see events in Iraq as having taken a dangerous turn, with the stability of the southern oil system now starting to become a potential concern," he said.