Brent moves higher as Houthis seek to shut Bab al-Mandeb Strait
The front-month ICE Brent contract has jumped $3.53/bbl on the day, to trade at $97.82/bbl at 09.00 GMT.
IMAGE: Oil pumpjacks. Getty Images
Upward pressure:
Brent crude is trading close to the $100/bbl threshold as the US-Iran conflict has effectively spread to the Red Sea.
Yemen’s Iran-backed Houthi militants have targeted two oil tankers – the Encelia and Layla – in the Bab al-Mandeb Strait for violating their maritime embargo on Saudi Arabian oil shipments.
Meanwhile, US President Donald Trump has made it clear that US military action in the region will be further ramped up, as the conflict shows no sign of de-escalation.
“Any time the Islamic Republic of Iran shoots at a ship in the Strait of Hormuz… the United States will bomb and destroy ONE BRIDGE OR POWER PLANT,” Trump wrote on social media platform Truth Social.
Downward pressure:
Brent’s price came under some downward pressure after the US Energy Information Administration (EIA) reported an increase in US crude stocks.
US crude oil inventories gained by 2 million bbls to 411.7 million bbls in the week ending 17 July, according to data from the EIA. A build in US crude stocks can indicate lower demand for oil.
By Aparupa Mazumder
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