Trump Threatens Iran, Red Sea Attack Boosts Oil
US President Donald Trump threatened major military sanctions against Iran and the Houthi group after two Saudi oil tankers were attacked in the Red Sea. The tensions pushed Brent oil prices up more than 6%, surpassing US$100 per barrel for the first time since May.
The oil price increase was fueled by concerns that the Middle East conflict could disrupt other vital shipping lanes. The Houthi attacks raised the risk of closing the Bab el-Mandeb Strait, one of the world's main energy shipping routes after the Strait of Hormuz.
The Houthis claimed to have attacked the tankers Encelia and Layla using missiles and drones. The Encelia reportedly sent a distress signal after being hit near the Saudi Arabian port of Jizan, while shipping insurance costs in the Red Sea have doubled for some companies.
Supply risks have worsened after the number of tankers passing through the Strait of Hormuz dropped to just one on Thursday, the lowest level since May 7. Some vessels have also begun rerouting to avoid Bab el-Mandeb, opting for the longer journey through the Suez Canal and around Africa.
Military tensions escalated after the United States launched airstrikes on Iran for 13 consecutive nights. Iran retaliated by attacking US military targets in Jordan and Kuwait, and vowed to continue attacks as long as its infrastructure and coastal areas remained targeted.
Disruptions to two major shipping lanes have the potential to tighten global energy supplies and keep oil prices high. If the conflict escalates and more ships avoid the Red Sea and the Strait of Hormuz, inflationary pressures and the risk of a global economic slowdown could increase. (asd)*
Source: Newsmaker.id
