Is Iran pushing Yemen rebels to attack Saudis to elevate the price of oil?

Bloomberg/Fuel Fix:
Crude erased losses as escalating conflict in the Mideast region that's home to almost half the world's oil canceled out an earlier rout in commodity markets.

Futures popped above $68 a barrel in New York on Monday after sliding as much as 1.8 percent. Iranian-backed Houthis in Yemen launched unsuccessful missile attacks against Saudi Arabia while kingdom-led forces killed a senior leader of the rebel group. The flare-up countered a slump in everything from energy to metals after the U.S. softened its position on sanctions against Russian aluminum giant United Co. Rusal.

"It seems to be an escalation but Saudi Arabia has been very good at shooting these missiles down,"'said Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago. "The concern for oil really comes at what happens if it hits?"

Oil has risen more than 5 percent this month amid geopolitical tensions in the Middle East. At the same time, OPEC's cuts have continued to erode a worldwide excess. It won't be necessary to extend historic supply limits if oil prices keep rising, Iranian Oil Minister Bijan Namdar Zanganeh said, according to the ministry's Shana news service.
Iran's currency has been in free fall because of concern over reimposition of US sanctions in May when Trump has said he will not renew the waivers contained in Obama's bad deal with Iran.  The Iranians may have already squandered the windfall Obama gave them for making the deal and they may need to oil revenue to sustain their operations in Syria and their preparations for attacks on Israel.

While some speculate that reimpositions of sanctions on Iran will drive up the price of oil, I doubt it.  It would be easy enough for the rest of OPEC, plus the Russians to make up the difference with increased production as well as the US.


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