Oil prices soared today, with Brent nearing $100, as war in the Middle East appeared to widen as Yemen’s pro-Iranian Houthi rebels claimed responsibility for attacks in the Red Sea on Saudi oil tankers.
Around 12:40 GMT, North Sea Brent crude for September delivery was up 4.68% at $98.47 a barrel, after rising 5% to $98.80. The American equivalent, West Texas Intermediate (WTI), for September delivery, registered an increase of 3.78% to 90.11 dollars a barrel.
The Houthis, who announced a blockade of Saudi Arabian ports on Monday, July 20, claimed a “military operation” against “two Saudi oil tankers that violated the blockade,” identifying the vessels as the Encelia and Layla.
A Saudi official source confirmed that the Encelia, “owned by a Saudi company”, “was targeted while sailing in the Red Sea”.
Maritime traffic through the Red Sea has become particularly important for Saudi Arabia: after the war in the Middle East began, Riyadh significantly increased oil exports through the port of Yanbu, on the country’s western coast, bypassing the Iranian blockade of the Strait of Hormuz.
According to PVM analyst John Evans, the amount of oil exported from this port corresponds to 75% of the total amount exported in normal times from Saudi Arabia.
These attacks are affecting oil exports from the Middle East to Asia a bit more.
“The route between Yanbu in China is just over 20 days” passing off Yemen, while crossing the Suez Canal and bypassing Africa, means a travel time of “greater than 50 days”, explains the PVM analyst.
Source: RES – BEE