Oil prices jump 4% after US-led airstrikes in Yemen
Oil prices soared 4% on Friday after the US and UK carried out air and sea strikes on Houthi targets in Yemen in response to attacks on shipping vessels by the Iran-backed group, reports Reuters. This caused oil tankers to change course from the Red Sea. As a result, Brent crude futures rose by $3.16, or 4.1%, to $80.57 a barrel, and US West Texas Intermediate crude futures by $3.05, or 4.2%, to $75.07.
Impact on global oil supply and shipping industry
The rerouting of oil tankers from the Red Sea has sparked worries about the Israel-Hamas conflict escalating into a wider Middle East confrontation, impacting oil supplies from the region, especially those passing through the crucial Strait of Hormuz. ING analysts highlighted that over 20 million barrels/day of oil travel through the Strait of Hormuz, accounting for around 20% of global consumption. Major shipping companies like Maersk are steering vessels away from the Red Sea, alerting customers to potential disruptions.
Reactions from world leaders
US President Joe Biden said the "targeted strikes" in Yemen sent a clear message that the US and its allies will not tolerate attacks on their personnel or "allow hostile actors to imperil freedom of navigation." While Houthis initially targeted only Israel-related vehicles in the region, they have now expanded to any ship related to Israel. Saudi Arabia urged restraint and avoid escalation, expressing deep concern over the situation.
