Oil prices gained over 2% on Friday following the US’s and the UK’s strikes on the Houthi rebels in Yemen in response to the attacks of the Iran-backed militia group on commercial shipping in the Red Sea from late 2023.
Brent crude futures rose 2.13% to $79.06 per barrel, while the US West Texas Intermediate (WTI) crude futures climbed 2.22% to $73.62 per barrel.
The increases added to the near 1% rise on Thursday, positioning the global and US benchmarks to record their second consecutive weekly surge.
US, UK Strike Houthi, More Shipping Disruptions Expected
US President Joe Biden stated on Thursday that the US and the UK have ‘successfully’ carried out airstrikes against over 60 Houthi targets in areas of Yemen controlled by the rebels, with residents in the country observing explosions throughout the land.
The strikes were the most intense move so far in the broadening Israel-Hamas conflict since it began in October.
Biden said the retaliatory attacks showed the US and its partners’ condemnation of the assault on its people and hostility towards freedom of navigation.
The move also received support from Australia, Bahrain, Canada, and the Netherlands, according to Biden.
The Houthi militant group has hit shipping vessels in the Red Sea with a wave of drone and missile attacks since October in support of Palestine’s Hamas in its war against Israel.
The assault in one of the world’s most crucial waterways has resulted in the largest disruption to world trade since the COVID-19 pandemic.
Danish shipping giant Maersk on Thursday stated that it would divert all ships around Africa and avoid Red Sea routes for the ‘foreseeable future,’ warning customers of significant repercussions that the ongoing disruption may bring about.
The latest attack from the US and the UK also came after the Iranian navy captured a Tukey-bound tanker carrying Iraqi oil in response to the US’s seizure of the same ship and its crude in 2023. Washington has expressed their disapproval of the move.
Analysts saw a major concern with Iran’s capture as it occurred near the Strait of Hormuz between Oman and Iran.
The Gulf of Oman is close to the Strait of Hormuz, the world’s most important oil chokepoint, with its daily oil flow reaching over 20 million barrels per day (bpd) or about 20% of global consumption.
