Oil prices rose for the fifth consecutive day early on Thursday, topping $98 per barrel to the highest level in nearly two months, as Houthi attacks on tankers on the Red Sea route intensified concerns about supply from the Middle East.
Early on Thursday in Europe, Brent Crude prices passed $98 per barrel, rising by 4.21% to $98.03. The U.S. benchmark, WTI Crude, was nearing the $90 per barrel mark, trading at $89.57, up by 3.16% on the day, as the Iran-aligned Houthis appeared to make good on their pledge to target Saudi Arabia’s oil exports from the Red Sea and the Bab el-Mandeb Strait.
The Red Sea oil chokepoint is critical for Saudi crude oil shipments after the Kingdom has managed in recent months to redirect more than 70% of its exports that previously shipped from the Persian Gulf to the Red Sea port of Yanbu.
At least two tankers have turned away from the Bab el-Mandeb Strait after Yemen’s Houthis said they have struck two Saudi tankers in the chokepoint in the latest Middle East war escalation, saying they had violated the naval blockade that the Yemeni forces declared earlier this week.
According to reports, one of the tankers was loaded with Saudi crude for India and the other was carrying oil to China.
“We targeted two Saudi oil tankers, named Encelia and Layla, for their violation of the blockade decision issued by the armed forces,” the Houthi forces spokesman, Yahya Saree, said, as quoted by Al Jazeera.
The oil price action from early Thursday extended oil gains to the fifth consecutive trading session, with prices now up by nearly 20% compared to before the re-escalation, which started two weeks ago.
“The fact that the Houthi rebels reportedly attacked two Saudi tankers near the Bab el-Mandeb Strait outside Yemen has increased concerns about escalation,” Maya Westerlund, Strategy & Macro Research Intern, FICC Markets at Sweden’s SEB bank, said in an early Thursday note.
By Tsvetana Paraskova for Oilprice.com
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