Oil prices rose on Tuesday as attacks on ships in the Red Sea by pro-Iranian Houthi militants in Yemen disrupted maritime trade and forced companies to divert ships.
Brent crude futures rose 21 cents, or 0.27%, to $78.16 a barrel at 05:30 GMT. West Texas Intermediate (WTI) crude oil futures expiring Tuesday rose 3 cents to $72.50 a barrel. The more active second-month contract rose 6 cents, or 0.08%, to $72.88.
Both indicators rose more than 1% on Monday on concerns that shippers would divert their ships from the Red Sea.
Despite today’s price stability, potential risks posed by supply disruptions and unrest in the Middle East could lead to serious fluctuations in oil markets. Oil markets may face further upward pressure if geopolitical and geoeconomic tensions increase.
Oil giant BP has temporarily halted all crossings in the Red Sea and its ships will avoid transiting this waterway likewise the oil tanker group Frontline.
There are concerns that the crisis will expand to include energy shipments.
Approximately 15% of world shipping traffic passes through the Suez Canal, which connects the Red Sea to the Mediterranean and offers the shortest shipping route between Europe and Asia.
The shipping attacks prompted the United States and its allies to discuss a task force to protect Red Sea routes, while Iran warned the move would be a mistake.
The rapid and collective response from several countries to alleviate the attacks may suggest that these disruptions will not be long-lasting, but this has led to some reservations being reflected in oil prices in today’s session.
Iranian Oil Minister Javad Owji said on Monday that petrol stations across the country were cyber-attacked.
The USA is trying to restrict Russia’s oil trade. The United States will force shippers to provide more information about Russian oil deals to enforce sanctions, U.S. officials said Monday, while also acknowledging that much of the trade has escaped Western oversight after Russia set up a parallel fleet.
