Oil retreats as Red Sea disruption threats ease

Brent’s price has declined after the Iran-aligned Houthi militants announced a temporary halt on all armed operations against commercial vessels transiting the Red Sea, except Israeli-owned or flagged ships.

PHOTO: A large cargo ship transiting the Red Sea. Getty Images

The armed group will stop attacking commercial and cargo vessels transiting the crucial Red Sea trade route and the Bab al-Mandab transit as a ceasefire deal has been reached on the Gaza Strip, the Yemeni armed group’s spokesperson Mohammed al-Bukhaiti said on social media platform X (formerly Twitter).

“As the date for implementing the ceasefire agreement approaches, we affirm our commitment to stopping our military operations in support of Gaza,” al-Bukhaiti said yesterday.

The news has put some downward pressure on Brent’s price as it has eased supply-related concerns in the oil-rich Middle Eastern region, specially around the Red Sea which has been under severe missile and drone attacks for over 12 months now.

The news also comes days after Israeli Prime Minister Benjamin Netanyahu’s war cabinet and the Palestinian militant group Hamas came to a six-week initial ceasefire agreement, with the gradual withdrawal of the Israeli army from the Gaza Strip, in exchange for Hamas releasing the Israeli civilians it took hostage on 7 October 2023.

The deal comes after months of negotiations by mediators from the US, Egypt and Qatar, and just ahead of president-elect Donald Trump's transition into the Oval Office.

By Aparupa Mazumder

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