Oil prices rose more than 2% during today’s trading, Friday, January 12 (2024), amid fears of disruption to supplies with increasing geopolitical tensions in the Middle East.
This came as the United States and Britain carried out strikes against Houthi military targets in Yemen in response to attacks by the Iranian-backed group on shipping in the Red Sea.
Oil prices ended their trading yesterday, Thursday, January 11, with an increase of 1%, amid fears of a shortage of supplies with increasing geopolitical tensions.
Oil prices today
By 07:24 AM GMT (10:24 AM Mecca time), futures prices for standard Brent crude, for delivery in March 2024, rose by 2.05%, to record $79 per barrel.
At the same time, futures prices for US West Texas Intermediate crude for February delivery rose by 2.11%, reaching $73.54 per barrel, according to data reviewed by the specialized energy platform.
Oil prices are heading for gains for the second week in a row, coinciding with fears of interruption of crude supplies from the Middle East following the closure of the largest oil field in Libya and the crisis targeting ships in the Red Sea.
Boats help an oil tanker unload its cargo at a port in China – Photo from Reuters
Oil price analysis
The US and British strikes are one of the most dramatic demonstrations yet of the breadth of the Gaza war since it broke out in October, with witnesses in Yemen confirming explosions across the country.
US President Joe Biden said that the “targeted strikes” were a clear message that the United States and its partners will not tolerate attacks on its personnel or “allow hostile actors to jeopardize freedom of navigation.”
The Houthi attacks in the Red Sea disrupted international trade on the main route between Europe and Asia, which represents about 15% of the world’s shipping traffic.
Since October, the Houthis have attacked commercial ships in the Red Sea to show support for the people of the Gaza Strip who face a war of annihilation from Israel.
Shipping giant Maersk (MAERSK) said on Thursday it would divert all ships away from the Red Sea for the foreseeable future, warning customers of further disruption.
The US-led attacks also follow Iran’s seizure on Thursday of a tanker loaded with Iraqi crude bound for Turkey in retaliation for the US seizure of the same ship and its oil last year.
The Houthi attacks were focused on the Bab al-Mandab Strait in the southwest of the Arabian Peninsula, and Iran’s detention was closer to the Strait of Hormuz between Oman and Iran, which analysts say is a major concern.
ING analysts said in a note: “The Gulf of Oman is located near the Strait of Hormuz, which is a vital corridor for oil flows, as more than 20 million barrels per day of oil moves through the strait, equivalent to about 20% of global consumption.” Hasima mentioned Reuters.
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2024-01-12 07:47:39
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