Oil jumps 4% as tankers avoid Red Sea after strikes
Kyiv • UNN
Oil prices rose by 4% amid US and UK strikes on Houthi targets in Yemen
Oil prices jumped by 4% on Friday as oil tankers avoided the Red Sea after overnight US and UK strikes on Houthi targets in Yemen following attacks on shipping by the Iranian-backed group, Reuters reports, UNN writes.
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Futures for Brent crude rose by $3.16, or 4.1%, to $80.57 per barrel at 13:24 Kyiv time, and futures for West Texas Intermediate crude rose by $3.05, or 4.2%, to $75.07.
Both brands were on track for a second consecutive weekly increase.
The US and UK strikes have heightened market concerns that the war between Israel and Hamas will escalate into a broader conflict in the Middle East, which will affect oil supplies from the region, especially those that go through the critical Strait of Hormuz, the newspaper writes.
"If most of the supply through the Strait of Hormuz were to be shut down, it would have an impact three times greater than the oil price shock of the 1970s and more than double the impact of the war in Ukraine on gas markets, on top of already fragile supply chains and inventory levels," said Saul Kavonik, energy analyst at MST Marquee.
ING analysts said in their note that more than 20 million barrels of oil per day pass through the Strait of Hormuz, which is equivalent to about 20% of global consumption.
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US President Joe Biden said that the "targeted strikes" in Yemen sent a clear message that the United States and its partners will not tolerate attacks on their forces or "allow hostile actors to jeopardize freedom of navigation.
A Houthi spokesman said the group would continue to attack ships heading to Israel.
Saudi Arabia, the largest oil exporter and power in the region, called for restraint and "avoidance of escalation" and said it was following the situation with great concern.
The Houthi attacks in the Red Sea have affected international trade on the route between Europe and Asia, which accounts for about 15% of global shipping.
The Houthis attacked commercial vessels in the Red Sea to demonstrate support for the Palestinian militant group Hamas in its fight against Israel.
Shipping giant Maersk and other companies have pulled ships from the Red Sea, warning customers of further disruptions.
The US-led attacks followed Iran's seizure on Thursday of a tanker carrying Iraqi oil bound for Turkey south of the Strait of Hormuz.
