Key facts
- Brent crude oil prices rose above $91 per barrel amid escalating Houthi attacks in the Red Sea.
- Tanker traffic through the Bab el-Mandeb Strait has decreased significantly due to Houthi threats and attacks.
- Saudi Aramco shipped record volumes of crude from its Red Sea port of Yanbu in the weeks leading up to July 17.
- The Caspian Pipeline Consortium suspended crude loadings at its Black Sea terminal following tanker attacks.
- Egypt is in talks to secure a substantial volume of LNG imports over the next three years.
Oil prices are surging toward $100 per barrel as escalating Houthi attacks in the Red Sea force tankers to reroute and raise concerns over prolonged supply disruptions. Brent crude has climbed above $91 amid fears of conflict expansion.
Saudi Aramco has been shipping record volumes of crude from its Red Sea port of Yanbu, potentially foreshadowing an escalation. The Houthi rebels have warned shipping companies against loading cargo in Saudi ports, threatening strikes. Saudi Arabia relies on the 7 million b/d East-West pipeline to evacuate production, with limitations at the Yanbu port endpoint. In the week up to July 17, Saudi Aramco reportedly surpassed Yanbu’s capacity limits by loading an unprecedented 5.9 million b/d of crude.
Tanker traffic through the Bab el-Mandeb Strait has hit a multi-month low. At least one Saudi crude tanker, the Olympic Luck, has rerouted via the Suez Canal and around Africa. Two other tankers carrying Saudi crude to India and China made U-turns in the Red Sea after Houthis declared a naval blockade against Saudi Arabia. The Houthi threats to Saudi ports are linked to Saudi attacks on Sanaa airport and direct flights from Iran, escalating regional tensions.
In other market news, Vitol is reportedly considering selling its US shale oil joint venture VT Energy Partners for $2.3 billion. Chevron has signed an agreement for a potential cross-border oil pipeline project with Iraq and Syria. Vaar Energi and BlueNord have agreed to combine businesses in a $1.33 billion deal, creating Europe's largest independent oil producer. Japan's JERA is studying a US listing, and Magnolia Oil & Gas Corp is buying WildFire Energy for $4.1 billion.
The Caspian Pipeline Consortium suspended crude loadings at its Black Sea terminal after two tankers were attacked, impacting Kazakhstan's key export route. Mexico's Pemex rejected claims of lost production. Egypt's national gas company EGPC is in talks to secure 15-18 LNG cargoes per month for the next three years. India has reaffirmed its E20 ethanol blending target, displacing crude oil imports. The Panama Canal Authority will cut daily transits due to low water levels. Kazakhstan's KazMunayGas intends to pay its share of a disputed $5 billion environmental penalty at the Kashagan oil field. In the UK, Prime Minister Andy Burnham has scrapped VAT on household electricity bills and appointed Miatta Fanbulleh as energy secretary. Copper prices rose to a one-month high.