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Oil up amid ongoing Red Sea tensions

20 December 2023 08:00 (UTC+04:00)
Oil up amid ongoing Red Sea tensions

Oil prices continued to increase Tuesday as attacks on naval and commercial ships in the Red Sea have raised fears of possible supply route disruptions, Azernews reports, citing Anadolu Agency.

International benchmark crude Brent traded at $78.02 per barrel at 10.08 a.m. local time (0708GMT), a 0.09% increase from the closing price of $77.95 a barrel in the previous trading session on Monday. The American benchmark, West Texas Intermediate (WTI), traded at $72.69 per barrel.

Houthi rebels in Yemen, located at the Red Sea's southern mouth, said last month that they would target any Israeli-flagged ships making their way through nearby waters. The announcement on Nov. 19 came as Israeli attacks continued to pummel the blockaded Gaza Strip.

Yahya Saree, the group's spokesman, stressed on X that the Houthis would continue targeting all ships sailing in the Red Sea and the Arabian Sea and heading to Israel unless food and medicine are allowed to Palestinians in the Gaza Strip.

As a result of the attacks, many shipping companies have decided to halt their voyages in the Red Sea.

Ships passing through the Bab al-Mandeb Strait have had to change course due to rising tensions in the Red Sea, which puts pressure on oil markets. The strait in question is one of the most important routes in the world for global seaborne commodity shipments.

Egypt's Suez Canal Authority reported that 55 ships had been redirected to the Cape of Good Hope at the southern tip of Africa instead of the Bab al-Mandeb Strait since Nov. 19. If the tension continues, more ships are expected to change their route, which could disrupt oil supply.

Experts suggest that potential risks caused by supply disruptions and conflicts in the Middle East may cause serious fluctuations in oil markets.

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