Oil prices became bullish after the United States and Britain carried out strikes against Houthi military targets in Yemen in retaliation for attacks by the Iran-backed group on shipping in the Red Sea starting late last year. However, regardless of the success recorded by the UK and US-aligned forces, experts believe that this act will raise the prospect of escalating conflict in the Middle East. Brent futures rose by 2. 3%, $79 per barrel on Friday, January 12, 2024, while US West Texas Intermediate (WTI) crude futures rose by $1.80, or 2.5 percent higher, at $73.82, before settling at $72.02.
15 percent of the world's shipping traffic ply the channel connecting Europe and Asia, however, this route has been severely hampered by the Houthi attacks in the Red Sea which has disrupted international commerce
To aid Palestinian militant group Hamas in its conflict with Israel, the Houthis have been attacking commercial ships arround the Red Sea since October.
Maersk, a major shipping company, announced on Thursday that it will be rerouting all of its vessels out of the Red Sea for the foreseeable future and has alerted customers of further disruptions.
The U.S. and Britain hinted that if the attacks persist, they might act more forcefully. The U.N. Security Council endorsed a resolution demanding an immediate end to the Houthi strikes.
U.S. President Joe Biden said the “targeted strikes” were a clear message that the United States and its partners will not tolerate attacks on its personnel or “allow hostile actors to imperil freedom of navigation”. Australia, Bahrain, Canada, and the Netherlands supported the operation, he said.
