Oil: Geopolitics test supply routes – BNY
BNY’s Geoff Yu reports Oil prices rose after the Houthis claimed a missile strike on a Saudi tanker near Yanbu, highlighting risks to alternative export routes while Strait of Hormuz disruptions persist.
BNY's Geoff Yu reports that oil prices increased following the Houthis' claim of a missile strike on a Saudi tanker near Yanbu, indicating potential risks to alternative export routes. While Washington anticipates progress on an Iran deal, non-state actors may still pose challenges to achieving a smooth de-escalation in energy markets.
The United States claims an agreement with Iran to reopen the Strait of Hormuz could be imminent, but the Houthis' attack on a Saudi tanker in the Red Sea underscores that a state-to-state deal may not be binding for every regional player. The group asserted responsibility for the attack, reigniting concerns about a second shipping chokepoint.
Although oil prices initially surged, the physical effects seem contained, but the incident underscores the difficulties in achieving a clean de-escalation through diplomacy. The Houthis have previously claimed to have struck other Saudi tankers and oil infrastructure, while Saudi Arabia retaliated with airstrikes on Houthi facilities in Hodeidah.
The incident underscores the risks to Saudi Arabia's alternate export route through Yanbu, as disruptions in the Strait of Hormuz persist.
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