Yemen Escalation Raises New Risks for Global Oil Markets
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We provide what many… A conflict that has simmered in Yemen for years has flared in recent weeks, with consequences that could reach far beyond the Middle East.
The Houthi rebels have seized nearly all of Yemen’s Red Sea coastline, giving the Iran-aligned militant group control of the Bab al-Mandab Strait, a key chokepoint for global trade.
The Houthis have also intensified attacks on energy facilities in Saudi Arabia, the group’s foe and the world’s biggest oil exporter.
Riyadh has been forced to temporarily shut down a crucial oil pipeline after a drone attack that it blamed on a pro-Iranian militia in Iraq.
The escalation in the Houthi-Saudi conflict has contributed to a recent surge in oil prices, which rose to $110 on September 15, the highest in months, before falling slightly.
Experts warn that a prolonged shutdown of Saudi Arabia’s critical East-West pipeline or a Houthi attempt to block the Bab al-Mandab Strait, which accounts for around 6 percent of the world’s seaborne-traded oil, could send shockwaves around the world.
Even before the recent escalation in hostilities in Yemen, energy markets were rattled, and the global economy was upended by the Iran war, which has effectively closed the Strait of Hormuz, the world’s most important oil and gas artery.
Although major fighting has been halted in the war that began in late February, Tehran and Washington continue to trade sporadic strikes, including on shipping.
“It continues to be a dynamic of two conflicts: the Saudi-Houthi conflict and the US-Iran conflict, both of which are putting pressure on international oil markets and the international oil supply,” said Gregory Brew, an oil expert and senior analyst at the New York-based Eurasia Group.
American investment bank Goldman Sachs has warned that global oil prices could reach $120 a barrel if the Iran and Yemen conflicts continue.
Scores have been killed in Yemen since the Houthis launched a lightning offensive against the country’s internationally recognized government last week, capturing the key port city of Mokha and islands in the Red Sea.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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