Abu Dhabi oil site attack push Brent prices higher

Satellite photos obtained by The Associated Press on Tuesday appear to show the aftermath of a fatal attack on an oil facility in the capital of the United Arab Emirates claimed by Yemen’s Houthi rebels.

The attack brought the long-running Yemen war into Emirati territory on Monday. That conflict raged on overnight with Saudi-led airstrikes pounding Yemen’s capital, Sanaa, killing and wounding civilians.

Meanwhile, fears over new disruptions to global energy supplies after the Abu Dhabi attack pushed benchmark Brent crude to its highest price in years.

The images by Planet Labs PBC analysed by the AP show smoke rising over an Abu Dhabi National Oil Company fuel depot in the Mussafah neighbourhood of Abu Dhabi after the attack. Another image taken shortly after appears to show scorch marks and white fire-suppressing foam deployed on the grounds of the depot.

The Abu Dhabi National Oil Company, known by the acronym ADNOC, is the state-owned energy firm that provides much of the wealth of the UAE, a federation of seven sheikhdoms on the Arabian Peninsula and also home to Dubai.

ADNOC did not respond to questions from the AP asking about the site and damage estimates from the attack. The company had said the attack happened around 10 a.m. Monday.

“We are working closely with the relevant authorities to determine the exact cause and a detailed investigation has commenced,” ADNOC said in an earlier statement.

The attack killed two Indian nationals and one Pakistani as three tankers at the site exploded, police said. Six people were also wounded at the facility, which is near Al-Dhafra Air Base, a massive Emirati installation that is also home to American and French forces.

Another fire also struck Abu Dhabi International Airport, though damage in that attack could not be seen. Journalists have not been able to view the sites attacked and state-run media have not published photographs of the areas.

Police described the assault as a suspected drone attack. The Houthis claimed they used cruise and ballistic missiles in the attack, without offering evidence.

Fears over future attacks reaching the UAE, a major oil producer and OPEC member, helped push Brent crude oil prices to their highest level in seven years. On Tuesday, a barrel of Brent crude traded at over US$87.50 a barrel, a price unseen since October 2014.

“The damage to the UAE oil facilities in Abu Dhabi is not significant in itself, but it raises the question of even more supply disruptions in the region in 2022,” said Louise Dickson, an analyst at Rystad Energy. “The attack raises the geopolitical risk in the region and may signal the Iran-US nuclear deal is off the table for the foreseeable future, meaning Iranian oil barrels are off the market.”

Although the UAE has largely withdrawn its own forces from Yemen, it is still actively engaged in the conflict and supports Yemeni militias fighting the Houthis.

The incident comes as the Houthis face pressure and are suffering heavy losses on the battlefields. Yemeni government forces, allied and backed by the UAE, have pushed back the rebels in key provinces. Aided by the Emirati-backed Giants Brigades, the government forces took back the province of Shabwa earlier this month in a blow to Houthi efforts to complete their control of the entire northern half of Yemen.

While Emirati troops have been killed over the course of the conflict, now in its eighth year, the war has not directly affected daily life in the wider UAE, a country with a vast foreign workforce.

AP