Oil continues its weekly gains, rising 1 percent, as tension continues in the Red Sea

Oil prices rose as much as 1 percent on Friday as tensions continued in the Middle East following Houthi attacks on ships in the Red Sea, although Angola’s decision to withdraw from OPEC raised questions about the cartel’s effectiveness in supporting prices.

By 0409 GMT, Brent crude futures rose 86 cents, or 1.1 percent, to $80.25 per barrel. US West Texas Intermediate crude futures also rose 81 cents, or 1.1 percent, to $74.70 per barrel.

Both benchmarks rose more than four percent for the second week in a row as concerns about shipping in the Red Sea pushed prices higher.

More shipping companies are avoiding the Red Sea due to Houthi attacks on ships in support of the Palestinians, causing disruptions to global trade through the Suez Canal, through which about 12 percent of global trade traffic passes.

German Hapag-Lloyd and Hong Kong-based Orient Overseas Container Line said they would avoid the Red Sea by rerouting ships or suspending sailings, becoming the latest two companies to announce this.

On Tuesday, the United States launched a multinational operation to protect trade in the Red Sea, but the Houthis warned against continuing attacks.

Angola had previously protested the decision of the broader OPEC+ group to reduce the country’s oil production quota for 2024.

In recent months, the Saudi-led group of producers has mobilized support for further production cuts and a boost in oil prices.

Saudi Arabia, Russia and other members of OPEC+, which pump more than 40 percent of the world’s oil, agreed to voluntary production cuts totaling about 2.2 million barrels per day in the first quarter of 2024.