Red Sea Risk Revives Oil Market Volatility
Oil prices took a hit on Tuesday after a deal was announced to ease tensions in the Middle East, but the market's enthusiasm was short-lived. The WTI and Brent crude selloffs reached as high as 5% before reversing course just hours later.
The Red Sea oil premium rose again due to a claimed Houthi attack near Yanbu, which put a Saudi tanker under threat. This incident occurred mere hours after the market had already begun to recover from Tuesday's sell-off.
Despite the diplomatic efforts aimed at easing tensions in the region, the physical picture on the ground remains unchanged. The Hormuz traffic is still barely above depressed levels, and the API reported a 2.7 million barrel build, giving bears a domestic number to pair with the diplomatic headlines.