Oil crosses $105 a barrel as West Asia hostilities escalate
Yemen’s Houthi militia has captured the critical Red Sea city of Mocha, widening its hold over the strategic Bab-al-Mandeb strait, a vital global trade corridor, according to a report by Al Jazeera.
Oil prices surged past the $105 per barrel mark on Thursday, with Brent crude increasing by over 4% to reach $105.82 a barrel, according to the Intercontinental Exchange. This marked a climb of 4.55% from its previous close. Brent crude prices have not been this high since six weeks ago. The escalation in conflict in West Asia, particularly the Houthi militia's advance towards the Bab-al-Mandeb strait, is largely responsible for the price rise.
The Houthi militia now controls the strategic Red Sea city of Mocha, a crucial part of the Bab-al-Mandeb strait, which is vital for global trade. This control poses a significant threat to Saudi crude exports through this route, thereby impacting global oil supplies. On Wednesday, Brent crude reached $100 a barrel for the first time in six weeks.
India, which imports approximately 90% of its crude, is particularly vulnerable to such price increases. A persistent $1 rise in crude prices could increase India's annual crude import bill by around ₹18,000 crore, which currently accounts for 17% to 25% of India's total merchandise imports.
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