Oil Gains as Iran War Escalates With Houthi Attacks on Israel

4s871ac5qoeew4]sk81a8v98_media_dl_1.png ICEArticle content(Bloomberg) — Oil advanced as Iran-backed Houthi militants in Yemen entered the Middle East war and more US troops arrived in the region, raising fears the widening conflict will cause further chaos for energy markets.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentBrent — on track for a record monthly gain — surged more than 3% at the open to $116.43 a barrel after the Houthis fired missiles at Israel over the weekend, and said they would continue operations until attacks on Iran and its proxy militant groups cease.

West Texas Intermediate jumped above $100.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentWhile the militant group didn’t say they would target vessels transiting through the southern Red Sea and the Bab El-Mandeb Strait, they have the capability to do so.

The Saudi Arabian port of Yanbu, which the kingdom is using for some of its oil exports after the crucial Strait of Hormuz was effectively closed by the war, is also well within the range of Houthi missiles.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentThreats from the Houthis to “Saudi oil infrastructure and exports through the Red sea outlet is like denying bypass surgery that worked well to arrest the full heart attack” of the Strait of Hormuz closure, said Mukesh Sahdev, chief executive officer of XAnalysts Pty.Article contentBrent has surged more than 50% in March as the war between the US, Israel and Iran upended global markets and triggered concern about a simultaneous spike in inflation and slowdown in growth. The conflict has entered its fifth week and is showing no sign of abating despite a diplomatic push by Washington last week and separate peace talks over the weekend in Pakistan.Article contentIran has choked off all but a fraction of the traffic passing through the Strait of Hormuz, the waterway that links the Persian Gulf to global markets. Tehran has moved to formalize its control of the artery, barring most vessels, while allowing a handful to pass, including from Pakistan, Thailand and Malaysia.Article contentArticle contentThe involvement of the Houthis presents a new risk for crude markets. The group effectively shut the Red Sea to most Western shippers after the war in Gaza began in 2023, forcing vessels to reroute. Any threats to cargoes loaded via Saudi Arabia’s Yanbu would further constrain supplies. Riyadh has been ramping up exports through Red Sea, cushioning the supply shock.Article contentThe move by the Houthis adds “upside risk mainly via shipping and Red Sea routing,” said Haris Khurshid, chief investment officer at Karobaar Capital LP in Chicago, “But unless it spills into broader Gulf infrastructure or Hormuz flows, it’s more volatility than a true supply shock,” he added.Article contentBanks have been scrambling to calculate how the war — and prices — may evolve.

Macquarie Group Ltd. said last week futures may hit $200 a barrel if the conflict drags on till June and Hormuz stays shut in a scenario with 40% odds.Article contentBrent’s prompt spread points to acute concern about near-term supply in a backwardated, bullish pattern, with the front-month contract trading at a huge premium to the next. The gap was more than $7 a barrel on Monday, compared with little difference the week before the war broke out.Article contentThe US has ordered thousands of troops to the region, fanning fears of a risky ground invasion.

The Washington Post reported the Pentagon is preparing for weeks of ground operations in Iran, citing US officials, but senior administration staff, including Secretary of State Marco Rubio, have downplayed such a move.Article contentThe conflict has hit other industries. Over the weekend, Emirates Global Aluminium sustained “significant damage” during an Iranian missile and drone strike on Saturday. In addition, an Aluminium Bahrain facility was hit.Article content—With assistance from Rong Wei Neo and Rob Verdonck.Article contentTrending Oil Gains as Iran War Escalates With Houthi Attacks on Israel PMN Business A 35-Year-Old Crypto Bro Helped Pakistan Win Over Trump World PMN Business LNG Canada signs key pipeline agreement required for phase two expansion Energy Quebec demands Air Canada’s CEO resignation in 92 to 0 vote Airlines Meet the Canadian e-bike maker who is redefining the factory floor Electric Vehicles Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Oil Gains as Iran War Escalates With Houthi Attacks on Israel PMN Business A 35-Year-Old Crypto Bro Helped Pakistan Win Over Trump World PMN Business LNG Canada signs key pipeline agreement required for phase two expansion Energy Quebec demands Air Canada’s CEO resignation in 92 to 0 vote Airlines Meet the Canadian e-bike maker who is redefining the factory floor Electric Vehicles