OPEC+ Output Boost Can't Stem Oil Price Volatility Amid Houthi Attacks
OPEC+ recently agreed to increase crude oil output for a sixth consecutive month in September, but rising tensions between Saudi Arabia and Yemen's Houthi rebels have sent oil prices volatile. The Houthis launched an attack on southern Saudi Arabia on Thursday, injuring 11 civilians.
The Iran-backed group has also imposed a 'blockade' on Saudi exports in the Red Sea, disrupting oil shipments. This escalation comes as the US-Iran conflict simmers, with some signs that the two nations might reach a framework agreement about shipping in the Strait of Hormuz.
OPEC+ had pledged to monitor developments and act accordingly. Despite this, Brent crude and West Texas Intermediate are on track for weekly losses of approximately 8% and 5.3%, respectively. 'The optimism trade is unwinding because the physical picture never eased, and Iranian hardliners can sabotage any deal the mediators reach,' said Gareth Nicholson, chief investment officer of First Abu Dhabi Bank Asset Management.