Oil rises in light of the escalation of conflict in the Middle East and tankers diverting their course

Oil prices experienced a slight uptick on Tuesday, driven by escalating conflict in the Middle East. Ship tracking data indicated an increased number of tankers diverting away from the Red Sea following attacks by Yemen’s Houthi movement in the region.

Brent crude futures saw a rise of 12 cents, approximately 0.2 percent, reaching $78.27 per barrel by 0002 GMT. On Monday, crude had closed down by 14 cents.

US West Texas Intermediate crude, on the other hand, recorded a decrease of 17 cents, equivalent to 0.2 percent, settling at $72.52 per barrel, following a public holiday in the United States on Monday.

The Houthi group, based in Yemen, declared its intention on Monday to broaden its targets in the Red Sea region, explicitly including American ships. The group affirmed its commitment to continuing attacks, particularly in the aftermath of strikes carried out by the US and UK on its positions in Yemen.

As a consequence of the unrest, more oil tankers altered their routes away from the southern Red Sea on Monday. This disruption led to increased shipping costs and extended transportation times for oil cargoes.

While oil prices had surged by 2 percent the previous week due to the intensifying conflict in the region, analysts suggest that the absence of a direct impact on oil production might constrain further gains. The situation remains dynamic, with market participants closely monitoring geopolitical developments for potential effects on global oil markets.