Houthi militants have vowed to retaliate over US and UK military strikes in Yemen, driving the world’s leading oil tanker operators away from the critical Red Sea trade route.
Oil prices briefly jumped above $80 a barrel for the first time in 2024 on Friday after the US and UK struck targets following more than 25 attacks by Houthi militants on shipping since November.
Energy traders warned that higher prices could be ahead as the conflict stemming from the Israel-Hamas war threatens to escalate in the wider region and cause further disruption to supply chains.
The International Association of Independent Tanker Owners (Intertanko), which represents almost 70 per cent of all internationally traded oil, gas and chemical tankers, warned members on Friday to “stay well away” from the Bab al-Mandab strait for the first time.
While as much as 91 per cent of container ship traffic was already avoiding sailing past Yemen, oil shippers had until now been more willing to use the route, with analysts calculating tanker journeys had fallen by less than a fifth before Friday.
Intertanko said the “threat period” for shipping could last for several days, if not longer.
Brent crude, the international oil benchmark, rose as much as 4.3 per cent to $80.75 a barrel, the highest level so far in 2024, before easing slightly.
“The key question is whether this well-telegraphed military action will achieve Washington’s intended aim of de-risking the Red Sea or expand this three-month war,” said Helima Croft, a former CIA analyst at RBC Capital Markets.
