Oil prices hit five-month high as more Houthi attacks prompt supply and inflation fears
Oil prices hit a five-month high on Tuesday after Yemen's Iran-backed Houthis continued their attacks on Saudi Arabia, further stoking supply fears and higher inflation that could prompt interest rate hikes. Brent, the benchmark for two thirds of the world's oil, was trading up 1.52 per cent at $111.30 per barrel at 2.27pm UAE time. West Texas Intermediate, the gauge that tracks US crude climbed…
Oil prices soared to a five-month peak on Tuesday after ongoing attacks by Iran-backed Houthis in Yemen intensified supply concerns and inflation, potentially leading to higher interest rates. Brent crude, which represents two-thirds of global oil, rose 1.52% to $111.30 per barrel, while West Texas Intermediate climbed 2.30% to $100.80 per barrel.
These prices last reached such levels in mid-May. The Houthis announced additional strikes on Saudi energy, airport, and military targets on Monday, exacerbating regional tensions and causing stock markets in the Gulf to decline. This escalation occurred after the rebels claimed six attacks on the kingdom, including assaults on King Khalid International Airport in Riyadh, a military base near Abha, a naval task-force camp, and a Saudi radar station in Bir Askar.
The US-Iran conflict has resulted in restricted crude supplies from the Middle East, prompting global efforts to maintain adequate supplies. The International Energy Agency recently agreed to release over 20 million barrels of diesel to alleviate the situation. Gulf oil producers have been transferring tankers to India and lowering prices to ensure crude reaches Asia despite congestion and persistent attacks in the Strait of Hormuz.
The ongoing conflicts have contributed to elevated energy prices and rising inflation, increasing the probability of another interest rate hike by the US Federal Reserve, set to convene next week. Analysts from US energy company Duncan Oil anticipate two consecutive rate hikes as Fed officials aim to combat inflation. The Strait of Hormuz, previously handling a fifth of global energy exports before the war, continues to face challenges.
Despite US Energy Secretary Chris Wright's statement that the US is open to allowing sanctioned oil tankers to ship crude legally, only 24 out of nearly 160 sanctioned vessels could potentially resume mainstream trade, according to analytics firm Kpler. Wholesale diesel prices have already surpassed $200 per gallon in Singapore and roughly $220 in Europe and the US, as reported by the Paris-based International Energy Agency.
Written by urgent.news from The National UAE's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
