ISLAMABAD
Crude oil prices jumped around 4 percent for the fourth straight session on Friday after the US and UK struck Houthi targets in Yemen and Iran seized a tanker in the Gulf of Oman, stoking fears of an escalation in geopolitical tensions that could threaten trade and oil flows.
As of 1235 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $2.76 (+3.57 percent) to reach $80.17 a barrel. Similarly, the West Texas Intermediate (WTI), the main oil benchmark for North America, went up by $2.69 (+3.74 percent) to $74.71 a barrel.
Brent ended last week higher by 2.23 percent, while WTI closed the week up by 3.01 percent and both are on the way to register another weekly gain. Both benchmarks shed more than 10 percent in 2023 on a year-on-year basis.
On the other hand, the price of Russian Sokol increased by $1.48 (+2.07 percent) to $72.95. Arab Light prices witnessed an increase of $1.48 (+1.88 percent) to reach $80.13 a barrel. Following suit, the price for Opec Basket increased to $78.28 a barrel with an uptick of $0.07 (+0.09 percent). The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.
Iran seized a tanker off the coast of Oman on Thursday, further increasing regional tensions. The vessel was “an American oil tanker” that was “stolen by the US and changed its name”, Iran’s official Islamic Republic News Agency reported.
Geopolitical tensions in the Middle East have been a key driver of oil price movement since early October. But attacks by the Iran-backed Houthis on ships in the Red Sea that disrupted trade and the flow of fuel, have escalated the situation in recent weeks.
The US and UK launched air strikes against the Houthis on Thursday, in response to the escalating Red Sea attacks. The rebel group has been firing missiles at ships for the past two months to retaliate against Israel’s assault in Gaza.
The Houthis this week launched their biggest coordinated attack in the Red Sea despite the presence of a US-led naval force. The air strikes on Houthi military positions are expected to diminish the group’s capabilities, a senior US administration official said on Thursday. The strikes were conducted along with “non-operational support” from Australia, Canada, the Netherlands and Bahrain.
US President Joe Biden said the “targeted strikes” were a message that the US and its allies would not permit attacks on its personnel or “allow hostile actors to imperil freedom of navigation”.
