In a tense day for the oil market, prices reached nearly $105 per barrel. This price increase is due to growing concerns about global oil supply stemming from the capture of the strategic port of Mocha by the Houthis in Yemen. This port, located near the Bab al-Mandab Strait, gives the Iran-backed Houthis greater control over this crucial strait through which about 10 percent of the world's oil supply passes.
Impact of the crisis on the global oil market
At 4:45 PM UAE time, Brent crude, a benchmark for two-thirds of the world's oil, rose by 4.12 percent to $105.40 per barrel. Additionally, West Texas Intermediate crude was traded at $100.20 per barrel, up 4.29 percent. Energy analysts warn that the Houthis' advance and the capture of strategic points like Mocha and Mayyun Island could have serious impacts on oil flows in the region.
The Bab al-Mandab Strait is particularly significant for Saudi Arabia, the largest OPEC producer. The country's oil exports to the Asian market are primarily conducted through this 20-kilometer channel. The Houthis had previously announced a "maritime blockade" against Saudi Arabia and began attacks on vessels passing through this channel. In response, Saudi Arabia has been forced to reroute its oil shipments through the Mediterranean.
While the Strait of Hormuz is effectively closed due to the war between the United States and Iran, both countries have recently intensified reciprocal attacks on oil tankers. The number of vessels passing through the Strait of Hormuz daily has sharply decreased to less than 100 ships. Meanwhile, the number of ships in the Bab al-Mandab Strait has also declined due to escalating tensions.
Oil prices reached nearly $126 per barrel in late April due to military attacks by the United States and Israel on Iran and Tehran's attacks on its Gulf neighbors. Although prices fell after peace talks, they have risen again to high levels with the escalation of military tensions.
