Oil prices reached $64 per barrel as an anti-corruption crackdown ensues in Saudi Arabia. Dozens of business moguls and princes have been arrested, leaving uncertainty surrounding policymaking and political stability.
Brent oil climbed to a high of $64.61 in the wake of the actions, its highest level since July 2015. The international benchmark has climbed over 40% since June. Meanwhile, crude oil hit $57.67 – its highest level in two years – as the political events created upward pressure on prices. The total volume traded was up 31%.
The allegations came as oil was enjoying an upward momentum, only propelling oil to new heights. The commodity needed a significant political event to catapult prices at such a fast pace. Although, it remains to be seen if the purge will continue to support prices in such a dramatic way.
The arrests included one of the richest men in the world, Prince Alwaleed bin Talal, who is a prominent investor in Twitter, Citigroup and many other companies.
Oil has risen for four weeks on the back of decreased supply and on the hope that the Organization of Petroleum Exporting Countries and allies will extend the production cuts beyond March 2018. Saudi Arabia, Iraq and Kuwait have all supported extending the scope of supply curtails.
However, the purge has created uncertainty in the kingdom’s business sector. Companies may be deterred from making business deals as they await to see if they are involved in the allegations.
Bankers are shaken after spending their careers dealing with rich clients of the kingdom, many of these have been added to the list of those under investigation.
Much of the allegations are centred around money laundering, embezzlement and stock market manipulation.