WASHINGTON (DTN) -- Nearby delivery oil futures on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange settled Monday's session modestly higher, supported by rising geopolitical tensions in the Middle East after Iran-backed Houthi rebels claimed responsibility for yet another attack on Saudi Arabian oil infrastructure, including refining and distribution complexes in Jubail and Jeddah.
Jubail, an industrial hub on the Persian Gulf coast, is home to one of Saudi Aramco's largest refineries, a joint-venture facility with France's Total SA that can process more than 400,000 barrels per day (bpd) of crude oil, according to a company statement. Aramco's refinery in Jeddah was decommissioned three years ago but it serves as a petroleum distribution facility that Houthis reportedly targeted before. Saudi Aramco has not yet confirmed the assault, which was claimed Sunday night by the Yemeni rebels.
Houthi military spokesman Yahya Sarea said the group fired 17 drones and two ballistic missiles into the targeted sites, adding the attacks would escalate should the Saudi-led coalition continue its engagement in Yemen's civil war.
Saudi Arabia intervened in Yemen's conflict in 2015 on behalf of an internationally recognized government against the Iran-backed Houthis rebels, with tens of thousands killed. For years, the United States designated Houthis as a terrorist group before the Biden administration removed them from terrorist list on Feb. 12. Attacks by the Houthis have since escalated, with the conflict broadly seen as a proxy war between Saudi Arabia and Iran.
The market is also monitoring indirect talks between Iran and the United States, which continue this week after both sides expressed confidence the negotiations are moving "in the right direction." The U.S. State Department suggested the United States could remove sanctions on the Islamic Republic in exchange for a return to compliance with the 2015 nuclear deal.
Iran has been subject to sanctions since 2018 that targeted the country's crude exports among other activities, when the administration of President Donald Trump unilaterally withdrew from the accord on May 8. Iran's crude production fell from 3.823 million bpd in April 2018 to 2 million bpd in December 2020.
Earlier in the session, the oil complex found support from an improved vaccination rate across the European Union, with Germany and France sharply increasing their daily inoculations.
The Robert Koch Institute for Disease Control reported Sunday Germany delivered COVID-19 vaccinations to 15% of all adults in the country, placing it on target to comprehensively vaccinate its population by midsummer. High-frequency data suggest EU's traffic activity has picked up and consumers are eager to spend savings accumulated during months of lockdown. German Economy Minister Peter Altmaier fed those expectations on Friday by calling for more aid to pandemic-hit businesses, including a program to help restaurants, clubs and hotels to restart after lockdowns unwind.
On the session, May West Texas Intermediate futures climbed 38 cents to $59.70 barrel (bbl) and the June Brent contract on ICE added 33 cents to $63.28 bbl. NYMEX May ULSD futures settled the session little changed at $1.8080 gallon and May RBOB futures added 0.79 cents to $1.9700 gallon.
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