Oil prices mixed while Houthis’ attacks on Red Sea continue

Oil prices mixed on Tuesday while Houthis’ attacks on navigation movement in the Red Sea continued to disrupt maritime trade which forced companies to reroute their ships from the the Red Sea routes.

“Despite price stabilisation today, the potential risks caused by supply disruptions and the Middle East unrest could bring significant volatility to oil markets,” Tina Teng, an analyst at CMC Markets in Auckland, told Reuters.

Brent Crude futures went up by 21 cents to reach $78.16 a barrel.

U.S. West Texas Intermediate (WTI) crude futures contract which hit expatiation on Tuesday, dropped 18 cents to $72.29 a barrel. It’s worth noticing that Up 10 cents, or 0.1 percent, to $72.72 a barrel, was the more active second-month contract.

Amid worries about the disruption in the Red Sea which causes ships to turn away from the Suez Canal route, both benchmarks rose by one percent on Monday.

“Oil markets may face further upside pressure if geopolitical tensions get escalated,” Teng added.

As the crisis seems to be spreading to include energy shipments, oil major BP temporarily halted all transits through the Red Sea, and oil tanker group Frontline announced on Monday that its vessels would not pass through the waterway.

The significance of the Suez Canal is that it links the Red Sea to the Mediterranean while providing a quick and safe route between Europe and Asia, therefore, 15 percent of international shipping pass use it. The Red Sea route also handles about eight percent of global oil trade, according to a Bloomberg report.

The Houthis attacks, however, have caused the U.S. and allies to look into the possibility of a task force to protect the Red Sea routes, a move that Iran objected against.

At the sane time, Iran’s Oil Minister Javad Owji said on Monday that a cyberattack was to blame for the countrywide disruption of gas stations.

Iranian state TV and Israeli local media reported that an attack disrupting services at gas stations nationwide on Monday was carried out by a hacking group that Iran accuses of having ties to Israel.

While acknowledging that a significant portion of the trade has already escaped Western oversight as a result of Russia building a parallel fleet, U.S. officials stated on Monday that the country will push shippers to reveal more information about their dealings with Russia to enforce sanctions.