Key facts
- Crude oil prices reached their highest levels since May, with Brent crude trading at $107.86 and WTI at $102.28.
- Benchmarks added approximately 13% from the previous week, marking the sharpest weekly gain since mid-July.
- The Houthi militia took control of the Yemeni Red Sea port city of Mokha, increasing their presence near the Strait of Hormuz.
- Attacks by Yemeni Houthis on Saudi energy infrastructure and tanker traffic in the Red Sea are intensifying.
- US oil reserves are at their lowest level since 1982, with 289.7 million barrels.
Crude oil prices continued their ascent this week, hitting their highest point since May as Middle East hostilities persist and peace prospects dim. Brent crude was trading at $107.86 per barrel, and West Texas Intermediate at $102.28 per barrel, representing a roughly 13% increase from the prior week, the sharpest weekly gain since mid-July.
ING commodity analysts noted that the market is repricing the duration and severity of the conflict, alongside a growing recognition of the threat to regional supply. While significant volumes still transit the Strait of Hormuz, flows are below pre-war levels, indicating a fragile situation.
Attacks by Yemeni Houthis on Saudi energy infrastructure and tanker traffic in the Red Sea have intensified. The Houthis' recent capture of the Yemeni Red Sea port city of Mokha grants them a direct presence near the Strait of Hormuz, a vital chokepoint for global oil transportation. This development, coupled with mutual attacks on tankers by US and Iranian forces in the Persian Gulf, is driving oil prices higher.
IG analyst Tony Sycamore suggested that WTI crude is likely to retest its early March high of $119.48, given the escalating conflict and Iran's willingness to broaden its scope.