Oil prices rose to a near six-week high on Wednesday, with Brent crude surpassing $95 a barrel, on mounting concerns about disruptions to Middle Eastern supply routes because of escalating hostilities between the U.S. and Iran and threats to shipping by the Iran-backed Houthi militia in Yemen.Brent crude futures were up $4.04 or 4.44% at $95.05 a barrel after hitting a session high of $95.24.U.S. West Texas Intermediate crude climbed $3.65, or 4.33%, to $87.99.Both benchmarks touched their highest levels since June 11.The U.S. military said it carried out an 11th consecutive night of attacks on Iran. The U.S. attacks came a short while after the Kuwaiti army said its air defences were intercepting Iranian drones.As well as the renewed conflict over control of the Strait of Hormuz, the Iran-aligned Houthis have opened a new front in the war by threatening to target vessels carrying Saudi oil in the Bab el-Mandeb strait and announced a naval blockade of Saudi Arabia."The energy market now has the dual-strait worry, with the Bab el-Mandeb Strait looking like it could join the Strait of Hormuz as a hot spot, as traders closely watch shipping numbers in the Red Sea," said Tim Waterer, chief market analyst at KCM Trade.Bab el-Mandeb at the southern entrance to the Red Sea has become an increasingly important route for Saudi Arabian crude exports as traffic through the Strait of Hormuz has fallen sharply again since a ceasefire between the United States and Iran collapsed earlier this month.Three oil tankers loaded with Saudi crude for China and India made U-turns in the Red Sea on Tuesday, heading towards the Suez Canal rather than braving the Yemeni coast."The (Houthi) threat has led tankers to divert which could further pressure the physical market and Saudi exports, contributing to push prices to the upside," said Frank Walbaum, market analyst at trading platform Naga.com.In response to the Houthi warnings, Asian refiners are seeking to ship crude oil from Saudi Arabia's Red Sea port of Yanbu through the Suez Canal and around Africa.While global oil stockpiles have drawn amid the conflict, the latest U.S. data is showing some building of inventories.Data from the American Petroleum Institute showed that U.S. crude and distillate inventories rose last week, while gasoline stockpiles fell, market sources said. The inventory data comes ahead of official figures from the U.S. Energy Information Administration on Wednesday.
Brent crude surges 4% to over $95 a barrel, nears 6-week high as conflict threatens key oil transit routes
Oil prices hit a six-week high on Wednesday, with Brent crude racing past ninety-five dollars a barrel. The growing tensions between the U.S. and Iran have sparked fears of supply disruptions affecting critical shipping lanes. Moreover, threats from the Houthi militia are hindering oil tanker operations in the Red Sea, compelling traders to closely observe global shipping trends.
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