An oil tanker anchored in the Red Sea off the coast of Yemen’s contested western province of Hodeida on July 15, 2023.
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Oil prices rose after Britain and the United States carried out military strikes against targets in Houthi-controlled areas of Yemen, as tensions in the Red Sea mount further.
West Texas Intermediate and Brent futures spiked more than 4% to hit their highest levels since Dec. 27. U.S. crude oil jumped to $75.25 a barrel while the global benchmark touched $80.75. WTI and Brent were both trading above their 50-day moving averages for the first time since late October.
Brent was last trading around 3.32% higher at $79.98 a barrel, while WTI was last up 3.43% at $74.49 per barrel.
“These targeted strikes are a clear message that the United States and our partners will not tolerate attacks on our personnel or allow hostile actors to imperil freedom of navigation in one of the world’s most critical commercial routes,” U.S. President Joe Biden said in a statement Thursday evening.
While the U.S. has carried out strikes on Iranian proxies in Syria and Iraq since the outbreak of the Gaza war, this would be the first known strike against the Iran-backed Houthis in Yemen.
WTI prices in the past six months
The Houthis have been attacking vessels in the Red Sea, targeting global shipping vessels including those from the U.S. and Israel, in retaliation for the war in Gaza that has so far killed nearly 23,000 people in the Palestinian enclave.
Major shipping companies stopped traversing the Suez Canal and Red Sea routes in early December, choosing to reroute via southern Africa instead. That’s resulted in longer and more expensive journeys which pushed up ocean freight rates.
In a televised speech on Thursday, the leader of Yemen’s Houthis, Abdul-Malik al-Houthi, vowed that any American attack on the group will not go without response.
Brent prices in the past six months
“We will confront the American aggression. Any American aggression will never remain without a response,” he said, cautioning that the response will be greater than “at the level of the recent operation” that the group is carrying out at sea.
In announcing the strikes on Thursday, Biden vowed he “will not hesitate to direct further measures to protect our people and the free flow of international commerce as necessary.”
