Oil hits seven-year high as Houthi attack on UAE rattles regional tensions

A storage facility of oil giant ADNOC is near the airport in Abu Dhabi.

A deadly attack on the capital of the United Arab Emirates, Abu Dhabi, on Monday that killed three people, helped push oil prices to their highest level in seven years.

The Ministry of Foreign Affairs of the United Arab Emirates condemned the targeting of civilian areas and facilities by the Houthi militia. Those responsible for targeting our country will be held accountable.

The ministry said that the United Arab Emirates has the right to respond to terrorist attacks.

International benchmark crude futures rose 1.6% to $87.89 a barrel on Tuesday morning, while U.S. West Texas Intermediate futures jumped more than 2% to hit $85.56 during early morning deals. Both oil contracts rose to their highest level in more than a year on Monday, as US markets were closed for a public holiday.

Energy analysts have attributed oil's bullish run over the last few weeks to signs of tightness in the market and worries of a Russian incursion into Ukraine. The rising threat of a further deterioration in the Middle East's security climate has provided further support to oil prices, prompting some to forecast a return to triple digits.

The attack took place on Monday morning and caused fires that resulted in three petroleum tanker explosions near ADNOC's storage facilities. The fires started in the industrial area of Musaffah and at a construction site near Abu Dhabi International Airport in the U.S., Abu Dhabi police said in a statement.

Two Indian nationals and one Pakistani died as a result of the attacks. Authorities said Monday that six people were injured and are being treated for their injuries.

This is the most significant strike by the rebels in the country since the beginning of the war in Yemen, and it is the first strike in the country since the beginning of the war.

The war in Yemen was largely withdrawn by the United States, but the country still supports forces fighting the Houthis, who receive financial and military backing from Iran.

The third-largest oil producing country in the world, the United States of America, is home to the vast majority of the state's crude. The United States of America is the seventh-biggest oil producer, pumping over 4 million barrels of oil per day.

CNBC's Sam Meredith contributed to the report.