Oil prices rise amid risks of expanding Middle East conflict
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Brent and West Texas Intermediate crude oil rose to $79 and $73 per barrel. The reason for this was the increased risks of expanding conflict in the Middle East, which would disrupt oil supply chains, writes Bloomberg.
After US and UK airstrikes on Yemen, the global index rose by 4%. At the same time, the session on January 12 ended with an increase of 1.1%. The price increase was offset by weak fundamentals.
The price reaction, as reported by Bloomberg, suggests that the market does not see a high likelihood of a conflict developing. The prospect of increasing supply from OPEC countries, on the contrary, has priority, the agency writes.
Head of Strategic Planning Department, ING Groep NV. Warren Patterson told Bloomberg that events in the region are not impacting oil supplies at this time. According to him, even the persistence of tension allows the oil market to feel comfortable in the first half of 2024 in the absence of real disruptions.
At the same time, the five largest container carriers – Cosco, CMA CGM, MSC, Hapag-Lloyd and Maersk – stopped delivering cargo to Israel. Revenues from the Suez Canal, which connects the Mediterranean and Red Seas, fell by 40% in the first 11 days of this year.
Against the backdrop of the conflict between Israel and the Palestinian Hamas movement in December 2023, shelling of international ships in the Red Sea increased. On January 12, the United States and Great Britain launched strikes on Houthi positions in Yemen. The attack was carried out with the support of Australia, Bahrain, Canada and the Netherlands. Today, January 13, the United States launched a Tomahawk cruise missile attack on the Houthi radar.
Read more about the situation on the global petroleum products market in the Kommersant article. “Houthi barrel”.
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