Global oil prices rose amid escalating tensions in the Middle East and investor concerns over possible disruptions to crude supplies. The market is reacting to the conflict between Saudi Arabia and the Iran-backed Houthis in Yemen.
CNBC reported this on Wednesday, October 14. December futures for Brent crude rose by 0.61% to $106.33 per barrel. November futures for U.S. West Texas Intermediate (WTI) crude increased by 0.63% to $94.73 per barrel.
Tensions in Yemen and the Strait of Hormuz
The situation escalated following a deadly attack by Yemen’s Houthi rebels on Riyadh’s main airport. In response, the Saudi Arabia-led coalition struck Houthi energy terminals and fuel reserves in Yemen.
“collateral damage among the civilian population”
This is how a coalition representative described the measures taken by the military, according to him.
Additional tension is being created by the confrontation between the United States and Iran over the Strait of Hormuz, a key oil transportation route. U.S. Central Command rejected statements by Iran’s military leadership claiming that Tehran controls the strait, as well as threats to sink U.S. warships that approach it.
CENTCOM stressed that the strait is controlled by U.S. forces and regional partners.
Outlook for Further Price Growth
Paul Tudor Jones, founder and chief investment officer of Tudor Investment, suggested that oil could rise by another $20–25 per barrel. Speaking on CNBC, he said he is betting on further price increases.
“If something were going to happen that would improve the situation, it would have happened before the midterm elections in the United States”
Paul Tudor Jones, founder and chief investment officer of Tudor Investment
Further movements in oil prices will largely depend on how the conflict develops and on potential threats to crude supplies.
Earlier, freight rates for exports of Russian oil to India rose to new record highs in early October amid increased risks in the Black Sea and rising prices on the global tanker market.
