Global oil prices fell on Tuesday after a brief stint at the US$104 per barrel mark amid fears of other copycat protests of the Egyptian uprising that ended in the overthrow of President Hosni Mubarak last week.
Brent North Sea crude, seen as the representative benchmark price for the Middle East and Europe, saw its April contract drop to $102.27 a barrel in late afternoon trading in London on Tuesday.
Reaching $104 a barrel, marked a two-year high for the commodity benchmark as political unrest and protests in oil-rich Bahrain continue fueling fears that it could spread across the oil and gas-rich region, disrupting crude supplies from the Gulf, which supplies about 17% of the world’s internationally traded oil. The situation is made more precarious with the recent spike in piracy at the mouth of the Arabian Sea.Â
Political and social unrest in the island Kingdom has been simmering in recent years where the majority Shia Muslim population is ruled by a Sunni Muslim royal family. In a bid to appease protestors and the opposition, King Hamad bin Isa Al Khalifa, ruler of Bahrain, ordered an increase in food subsidies and social welfare payments earlier this month. He had also ordered a payout of 1,000 dinars ($2,653) to each Bahraini family.
Similar unrests are taking place in Yemen and Iran, however, the current Middle East turmoil is not the sole driver for Brent’s high price trend. Strong Asian growth driven by a fast expanding Chinese economy had a part to play according to industry analysts.
