Oil prices have risen to their highest levels in two years as a corruption crackdown in Saudi Arabia has resulted in the arrest of numerous politicians.
A political purge in Saudi Arabia, the world’s largest crude oil producer has created a ‘run away’ market which has seen prices hit a 2-year high. A number of princes and ministers have been arrested on corruption charges as part of a major crackdown in the country.
Brent crude has climbed to $64/b, although analysts claim the situation in Saudi Arabia is not the only cause behind the increase and instead point to an overall uncertainty in regards to global politics, creating a high risk premium.
Tom Kloza, global head of energy analysis at Oil Price Information Service, said: "You can grab all sorts of different headlines when you have a runaway market, and this is a runaway market right now."
Oil prices are at their highest levels since the summer of 2015, with crude future prices reaching new highs overnight as a result of the arrests which were co-ordinated by Saudi Crown Prince, Mohammad bin Salman
In recent weeks, prices have found support from the conflict in Iraq which disrupted supply out of the country, while US President, Donald Trump refused to endorse the Iranian nuclear deal.
Nigeria also provided a boost to the oil market as its oil minister indicated that the nation could be ready to contribute to output cuts. OPEC’s plan was to reduce global output by 1.8 million barrels a day but Nigeria have been exempt from the production cap due to numerous attacks at its pipelines in the last year.
Unrest in the Middle East is also a factor as the conflict between Saudi Arabia and Iranian-supported rebels in Yemen is on-going, with news of a rocket fired towards Riyadh over the weekend.
Meanwhile, the Lebanese Prime Minister, Saad al-Harri handed in his resignation and acknowledged the destabilising influence of Iran in the country, further fuelling tensions.
Away from politics, recent data has showed strong demand growth and a drop in crude inventories, further adding to the bullish sentiment.