Tehran, Dec 4, IRNA - Tensions between major oil producers Saudi Arabia and Iran sent oil prices sharply higher in the first trading day of 2016 on to the prospect of supply disruption.


According to CNBC, benchmark US WTI light sweet crude was up 1.7 percent at $37.69 a barrel mid-morning in Asia, after jumping as much as 3.4 percent, while Brent crude was up 1.9 percent at $37.99 a barrel after spiking 2.3 percent in the last session.

The hasty reaction came after Saudi Arabia cut diplomatic ties with Iran, one day after the government and people of Iran protested to execution of dissident cleric Sheikh Nimr al-Nimr.

Oil prices were battered last year, sliding over 40 percent on the back of a supply glut.

Oil consumption, meanwhile, is likely to be strong this year, after most economies posted 2 percent growth in demand in 2015.

By IRNA