Houthi Gains Unleash New Oil Price Spike
A fragile truce in Yemen has collapsed, with Iran-backed Houthi fighters advancing against Saudi-backed forces along the Red Sea coastline. The Houthis claim to have taken control of the port city of Mokha, which lies just north of the Bab al-Mandeb waterway.
The fighting coincides with an exchange of fire between the US and Iran in the Persian Gulf. As a result, Brent crude prices surged to nearly $110 per barrel. Capital Economics warns that this escalation raises the risk of further energy price hikes.
Gasoline prices in the US have already increased by 34% from last year, averaging $4.28 per gallon. Diesel prices are up by 61%. Saudi Arabia's oil exports have plummeted to just 3.2 million barrels a day, their lowest level in over a decade.