Oil Prices Up as Houthis Intensify Attacks in Trading Sea Routes

February 23, 2024
oil prices cancel iran deal

By Adedapo Adesanya 

Oil prices went up on Thursday as Iran-aligned Houthis stepped up attacks in the Red Sea near Yemen while the market faced a large build in crude inventories in the world’s largest producer, the United States.

During the session, Brent crude futures increased by 66 cents to $83.69 per barrel and the US West Texas Intermediate (WTI) crude futures surged by 76 cents to $78.67 a barrel.

Worries came as the Houthis said they would escalate their attacks on ships in the Red Sea and other waters, adding they have introduced “submarine weapons” to reach their goals.

The group’s strikes are disrupting the vital Suez Canal trade shortcut that accounts for about 12 per cent of global maritime traffic, and forcing firms to take a longer, more expensive route around Africa.

Houthi militants have launched repeated drone and missile strikes in the Red Sea, Bab al-Mandab Strait, and the Gulf of Aden since November in support of Palestinians, as the Israel-Hamas war continues and the Gaza death toll reaches almost 30,000.

The group’s leader said on Thursday that “Operations in the Red and Arabian Seas, Bab al-Mandab Strait, and the Gulf of Aden are continuing, escalating, and effective,” warning that ships owned by individuals or entities in Israel, the US, and the United Kingdom or sailing under their flags are banned from these seas.

Retaliatory strikes by the US-British coalition have failed to stop its campaign.

Pressure came as crude inventories rose in the US by 3.5 million barrels to 442.9 million barrels in the week ending February 16, the US Energy Information Administration (EIA) said on Thursday.

On Wednesday, The American Petroleum Institute (API) reported crude oil inventories rose this week, by 7.168 million barrels for the week ending February 16.

Traders also anticipate that US refineries will soon begin to ramp up after seasonal maintenance and help draw down crude inventories.

British Petroleum’s 435,000 barrels per day Whiting refinery in Indiana, the largest in the US Midwest, will return to full production in March, after a power outage on February 1.

Also, TotalEnergies’ 238,000 barrels per day refinery in Port Arthur, Texas, is working to complete a restart, though it is still operating minimally following a weather-related power outage.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

Leave a Reply

Previous Story

Customs Street Cracks by 0.12% as Traders Sell Off Wema Bank, Others

weakening Naira
Next Story

Naira Falls at NAFEX, Parallel Market as Govt Battles Speculators

Latest from Economy

Don't Miss