Brent Crude Oil Surges Amid Red Sea Tensions and Shipping Disruptions

The price of Brent crude oil has surged above $107 per barrel due to tensions in the Red Sea and disruptions to shipping routes. The Houthis have threatened to strike Saudi Arabian ships passing through the Bab el-Mandeb strait, one of the key channels for oil exports from the Middle East.

Tanker rates have hit record highs, while bunker fuel shortages add to the cost of shipping. Around 80% of global trade relies on shipping, making disruptions to these routes a significant concern.

The shutdown of Saudi Arabia's East-West pipeline due to drone attacks has further tightened oil export options. The pipeline can transport up to 7 million barrels per day (bpd) and is crucial for bypassing the Strait of Hormuz.