Oil prices climbed more than 1% on Thursday after Iran asked Yemen’s Houthi movement to prepare to close the Bab al-Mandab Strait in the Red Sea, heightening concerns over Middle East energy supplies.
Brent crude futures rose 88 cents, or 1.04%, to $85.83 a barrel, while U.S. West Texas Intermediate (WTI) crude futures gained 94 cents, or 1.18%, to $80.54 a barrel.
“Disruptions in both the Strait of Hormuz and the Bab al-Mandab Strait at the same time would intensify pressure on supply chains, increase constraints on oil tanker availability, and drive up insurance premiums,” said Wael Makarem, Market Strategist at Exness.
Data from Kpler showed that oil shipments through the Bab al-Mandab Strait averaged 7.4 million barrels per day in June, equivalent to about 7% of global oil production, compared with 4.2 million barrels per day a year earlier.
The United States launched strikes on Iranian coastal missile sites on Wednesday after reimposing a naval blockade on Iranian ports. Iran responded by threatening to further disrupt regional energy exports, saying it was fighting a “war of survival” against the United States.
The latest escalation follows the collapse of a fragile ceasefire reached in June, reviving fears of a broader conflict and renewed disruption to energy flows through the Strait of Hormuz, which handled nearly one-fifth of global daily oil and liquefied natural gas trade before the war.
Source: Reuters
