Oil prices hit $105 per barrel as Houthis seize key Red Sea port

Oil prices skyrocketed on Thursday, reaching $105 per barrel, as the Houthi rebels seized control of the crucial Yemeni Red Sea port of Mokha. This move gives the Iran-backed group increased access to the Bab Al Mandeb strait, a vital waterway that carries around 10% of the world's oil shipments. Brent crude, which serves as the benchmark for two-thirds of global oil, rose 4.12% to $105.4 a barrel, while West Texas Intermediate, representing US crude, jumped 4.29% to $100.20 a barrel.

Sasha Foss, an energy analyst at CSC Commodities, expressed concern over the Houthi rebels' advances, stating that they are unsettling the oil market and threatening the flow of oil through the Red Sea. Given that the Strait of Hormuz is already partially blocked, this development poses significant risks. The Bab Al Mandeb strait is of particular importance to Saudi Arabia, OPEC's largest producer, as most of its oil exports to Asia pass through the 20km-wide channel.

The Houthis have previously imposed a maritime embargo on Saudi Arabia and have targeted ships passing through the strait. In response, Saudi Arabia has rerouted its oil shipments through the Mediterranean. The Strait of Hormuz remains under siege due to the ongoing US-Iran conflict, with both nations intensifying attacks on tankers, which has led to a sharp decline in the number of vessels navigating the strait.