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Red Sea Strikes Lift Oil Prices

A flurry of activity on a new front in the battle between Israel and Hamas boosted oil prices Monday morning.

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Futures on Brent crude oil, the international pricing benchmark, rose 2.9% from Friday’s closing level to $78.47 a barrel after a U.S. Navy destroyer in the Red Sea over the weekend shot down attack drones launched from Houthi-controlled territory in Yemen. Earlier on Monday, London oil giant BP said it had paused tanker shipments through the area.

Until now, the Israel-Hamas war has barely interrupted global flows of crude and fuel beyond small volumes shipped in and out of Israel. Oil was still sailing through the Red Sea on Monday.

Yemen’s Houthi forces have attacked several commercial ships crossing through the Bab el-Mandeb strait in recent weeks, complicating efforts by the U.S. and its allies to secure the critical shipping lane.

Despite Monday morning’s jump, the price of Brent crude is about 7% lower than it was before Hamas attacked Israel on Oct. 7. A weakening outlook for global oil demand and rising expectations for oil supplies from non-OPEC countries such as the U.S. have weighed on prices.


Image: Oil fleet