Houthi Attacks Send Oil Prices Soaring Over 3%

Oil prices surged over 3% on Monday as Yemen's Houthi group launched fresh attacks on Saudi Arabia and the Strait of Hormuz, adding to concerns over supply disruptions in the region.

The Houthis secured a position allowing them to launch unfettered attacks in the Bab el-Mandeb strait, which is a key oil supply channel. This development blocks off another key oil supply route, especially since a bulk of Saudi Arabia's oil shipments through Hormuz were diverted through the Bab el-Mandeb strait.

The attack also led to the shutdown of a crucial East-West pipeline in Saudi Arabia. ANZ analysts said that Riyadh has now lost the option to use western exports if the Strait of Hormuz deteriorates again, which is likely to put further upward pressure on oil prices this week.