Reuters – Oil prices rose on Monday after a breakdown in diplomatic ties between Saudi Arabia and Iran that some speculated could result in supply restrictions, although gains were tempered by data showing some of Asia‘s largest economies are struggling. Saudi Arabia, the world’s biggest oil exporter, cut diplomatic ties with Iran on Sunday in response to the storming of its embassy in Tehran following Riyadh’s execution of a prominent Shi’ite cleric on Saturday. Fellow Gulf producer Bahrain said on Monday it too would cut ties with Iran. Benchmark Brent crude futures were last up 72 cents on the day at $38.00 a barrel at 1323 GMT, off a session high at $38.50. U.S. West Texas Intermediate (WTI) futures were up 29 cents to $37.33 a barrel. “The two questions the market is grappling with are – where next in the Saudi Arabia/Iran stand-off? I think President (Hassan) Rouhani on the Iranian side would like to calm things down and push for no further escalation,” Energy Aspects analyst Richard Mallinson said. “The second question for the market is is there any uncertainty over the exact timing and volume of the return of Iranian barrels?” he said. The clash between the
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