Traders Focus On Red Sea Concerns As Oil Prices Rise

Today, oil prices experienced an uptick, driven by a more than one percent increase in the previous session. This surge is linked to apprehensions about potential disruptions in global trade and geopolitical tensions in the Middle East, primarily due to Houthi attacks on ships in the Red Sea.

As of 01:37 GMT, Brent crude futures showed a slight rise of six cents, equivalent to 0.1 percent, reaching $79.29 per barrel. Concurrently, US West Texas Intermediate crude recorded a 17-cent increase, or 0.2 percent, reaching $74.11 per barrel.

The concerns prompted Washington to establish a task force on Tuesday to safeguard trade in the Red Sea. Attacks by Iranian-backed Yemeni militants led major shipping companies to alter their routes, raising fears of ongoing disruptions in global trade.

Houthi rebels have declared their intent to challenge the US-led naval mission and continue targeting ships in the Red Sea in support of the Hamas movement governing the Gaza Strip.

While about 12 percent of global shipping traffic passes through the Red Sea and the Suez Canal, analysts suggest that the impact on oil supplies has been limited so far, given that most Middle East crude is exported through the Strait of Hormuz.

On Tuesday, the US Department of Energy announced the purchase of 2.1 million barrels of crude oil for delivery in February, bringing total purchases to about 11 million. This move is part of an ongoing effort to replenish the Strategic Petroleum Reserve after the largest sale in history last year.

Sources, citing data from the American Petroleum Institute, revealed that US crude and fuel inventories increased last week, contrary to analysts’ expectations of a decline in crude inventories in a Reuters poll. Official US inventory data from the US Energy Information Administration is scheduled for release at 15:30 GMT today.

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