Houthi Tanker Attacks, Brent Crudes to US$95
Oil prices rebounded after the Iran-backed Houthi group claimed to have attacked two Saudi Arabian tankers in the Red Sea. This attack escalated the Middle East conflict and raised concerns about disruptions to global energy supplies.
Brent crude rose 1.3% to US$95.25 per barrel after closing at a six-week high. Meanwhile, West Texas Intermediate, or WTI, rose 1% to around US$87.71 per barrel, after rising as much as 1.8% in early trading.
The Houthis claimed to have fired missiles and drones at two tankers, the Encelia and the Layla, for violating a blockade. Shortly before the statement, UK Maritime Trade Operations reported that a ship was hit by a projectile near Saudi Arabia's Red Sea coast and caught fire.
This attack is a serious escalation, marking the first attack on oil tankers in the Red Sea. This route is a vital route for Saudi Arabia to export oil and reduce its dependence on the Strait of Hormuz, which has also been disrupted by the US-Iran conflict.
Market concerns are growing as US forces launched a 12th day of attacks on Iran, while Tehran retaliated by attacking Kuwait. Meanwhile, the US and Iran are both dampening the prospects for peace talks, so the risk of a prolonged conflict remains high.
As a result, oil prices have the potential to remain strong as long as the attacks in the Red Sea and Strait of Hormuz continue to subside. If supply disruptions prolong, Brent could potentially break through US$100 per barrel. Rising oil prices could also trigger energy inflation, pressure the stock market, strengthen expectations of high interest rates, and make the US dollar and gold more volatile. (asd)*
Source: Newsmaker.id
