Houthis Strike Saudi Infrastructure, Sending Oil Prices Soaring
The oil price rose on Monday to above $100 per barrel for the first time in recent days, despite losses in the previous session. The surge was driven by a 1 percent increase, with Brent settling at $105.68 and West Texas Intermediate at $101.39. This comes as Iran-backed Houthi forces launched strikes on Saudi Arabia's infrastructure, including Perim Island at the mouth of the Red Sea and a military airbase in southern Saudi Arabia.
The Houthis' advance has raised concerns about the global oil supply, with officials closing a 750-mile pipeline that transported 7 million barrels per day of crude to the Red Sea port of Yanbu. While damage to the infrastructure is unclear, traders warn that it could cut off up to 4 percent of global oil supply if it stays down.
Meanwhile, traffic through the Strait of Hormuz continues to be disrupted, with Kpler reporting that only 14 ships made the passage on Sunday, twice the number from the day before. However, Ana Subasic, a trade risk analyst at Kpler, cautions that conditions in the waterway are 'escalating', and it's uncertain whether this will lead to further escalation or be a cycle to bring tensions back down.