Red Sea Clashes Send Oil Prices Soaring Above $100 per Barrel

Saudi Arabia's oil exports have taken a significant hit due to clashes in the Red Sea, causing prices to soar and testing the country's supply capacity. According to data from maritime intelligence firm Kpler, Saudi oil exports averaged 3.2 million barrels per day last month, the lowest in at least 13 years.

This represents a significant drop from the pre-war average of 7 million barrels per day. The US-Iran military exchanges around the Strait of Hormuz have added to the strain on global oil supplies. As a result, international oil prices topped $100 a barrel last week, with November Brent settling at $101.21 a barrel, up $3.29 or 3.36% from the previous session.

The escalation between Saudi Arabia and the Houthi rebels has disrupted even rerouted crude exports through the Red Sea. The Houthis have made clear they would keep the Red Sea open to ships not linked to Saudi Arabia, but this has not alleviated concerns for global trade. In fact, shipping data firm Leth Agencies reported that an average of 35 ships a day transited the Bab al-Mandab in August, the lowest since July last year.

Peter Sands of shipping analytics firm Xeneta noted that 'even the slight sense of relief shipping companies felt using the Red Sea before the recent escalation has completely vanished.' Saudi Arabia is now sending ships north in the Red Sea to use an Egyptian pipeline near the Suez Canal, but this adds several weeks to deliveries to Asia and increases expenses.