Brent gains as Houthis escalate conflict in the Red Sea
The front-month ICE Brent contract has gained by $1.79/bbl on the day, to trade at $104.09/bbl at 09.00 GMT.
IMAGE: Oil storage facility. Getty Images
Upward pressure:
Brent crude’s price is poised to end the week higher than it began, amid escalating US-Iran hostilities in the Middle East, dragging OPEC’s de-facto leader Saudi Arabia in the crossfire.
The Iran-backed, Yemeni militant group, the Houthis, have gained control of the Yemeni port city of Mokha and the islands of Hanish, advancing down the Red Sea coast.
“Oil prices surged again yesterday as tensions intensified in the Red Sea,” two analysts from ING Bank noted.
The move will allow the Houthis to increase control over the Bab al-Mandeb Strait, one of the world’s busiest shipping routes in the southern outlet of the Red Sea, according to analysts.
“As the Houthis have taken control of the Red Sea port of Mokha in Yemen, recent events increase the threat to shipping around the Bab al-Mandeb Strait,” ING Bank’s analysts added.
Downward pressure:
Brent’s price has felt some downward pressure after the Organization of the Petroleum Exporting Countries (OPEC) slashed global demand growth projection for the fifth consecutive time.
The Saudi Arabia-led group has reduced its global oil demand growth projection for 2026 to about 400,000 b/d, around 200,000 b/d lower than its previous estimate.
OPEC sees global oil demand to reach about 105.84 million b/d in 2026.
By Aparupa Mazumder
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