Oil Prices Surge Amid Red Sea Shipping Attacks and Kazakhstan Output Cuts
Oil prices are poised to finish the week on a high note, driven by concerns over shipping attacks in the Red Sea and output cuts in Kazakhstan.
A string of Houthi attacks on tankers in the Red Sea has sparked worries that the Bab el-Mandeb shipping route could be closed, which would have significant implications for global oil supply. The Iran-aligned Houthis had declared a naval blockade on Saudi Arabia, which had been diverting its oil via pipeline to circumvent Iran's closure of the Strait of Hormuz.
Kazakhstan's energy ministry announced that oil companies had temporarily cut back production after suspected Ukrainian drone attacks forced the country's main Black Sea export terminal to close. The Caspian Pipeline Consortium stopped receiving oil from Kazakhstan, which handles about 2% of global daily crude supply.
As a result, Brent futures have eased by 72 cents, or 0.72%, to $99.97 a barrel, but are still on track for a 13.5% advance this week. West Texas Intermediate (WTI) futures fell 70 cents, or 0.76%, to $91.49 a barrel, and is expected to rise by 10.9% weekly.
U.S. President Donald Trump vowed to 'hold Iran responsible' for any further attacks, while IG market analyst Tony Sycamore noted that the 'noose around global energy supply routes is pulling tighter again.'