Crude oil prices surge after US, UK strike Houthi targets

Sanaa: Crude oil prices experienced a significant uptick, surging more than 2.5 per cent on Friday, after the United States and United Kingdom executed joint strikes on Iran-backed Houthi targets in Yemen, CNN reported.

Brent crude, the global oil benchmark, has seen a 3.1 per cent rise since the beginning of the year, marking a notable increase attributed to the recent military actions. The strikes, aimed at disrupting Houthi capabilities and threatening global trade and maritime safety, have injected uncertainty into the energy markets.

The Red Sea, a critical waterway through which 12 per cent of global trade and 30 per cent of global container traffic flows, has been a focal point for disruptions, according to CNN.

Attacks by the Houthi rebels have forced ships to take longer routes around Africa, presenting challenges to global trade logistics. Additionally, the potential escalation in insurance costs due to increased risks in the region could further impact businesses.

“There are concerns that the current chaos could last for many months, which will be a huge headache for companies around the world,” Susannah Streeter, head of money and markets at investment platform Hargreaves Lansdown, said on Friday, as reported by CNN.

“With ships heading from Asia to Europe being re-routed around the South of Africa, it is taking, on average, an extra 10 days, and costs per ship are going up by USD 1 million, due to the delays and higher fuel bills,” she said.

“The risk is that supply chains are tightening up around the globe, increasing the risk of bottle necks which could once again fuel inflation,” she added.

Notably, Houthi rebels have initiated retaliatory assaults on the warships of the United States and the UK (United Kingdom) in the Red Sea in response to the assault by Western partners, a senior member of the Houthi group, Abdul Salam Jahaf, said in a statement on Friday, according to CNN.

The Houthi deputy foreign minister, Hussein al-Ezzi, meanwhile, issued a dire warning, calling what he described a “blatant act of aggression” and threatening serious consequences for both the United States and Britain.

According to Hussein al-Ezzi, US and UK fighter planes and vessels launched a “massive aggressive assault” on Yemen, according to CNN.

“Our country was subjected to a massive aggressive attack by American and British ships, submarines, and warplanes, and America and Britain will undoubtedly have to prepare to pay a heavy price and bear all the dire consequences of this blatant aggression,” CNN quoted al-Ezzi as saying.

Earlier today, the US President Joe Biden said that the targeted strikes were a clear message that the escalation of attacks by the Houthi rebels against commercial vessels would not be tolerated.

“Today, at my direction, US military forces–together with the United Kingdom and with support from Australia, Bahrain, Canada, and the Netherlands–successfully conducted strikes against a number of targets in Yemen used by Houthi rebels to endanger freedom of navigation in one of the world’s most vital waterways,” the US President said in a statement.

In his statement, Biden said these strikes were in direct response to “Houthi attacks against international maritime vessels in the Red Sea, including the use of anti-ship ballistic missiles for the first time in history.”

He noted that these attacks have endangered US personnel, civilian mariners, and our partners, jeopardised trade, and threatened freedom of navigation.

Moreover, UK Prime Minister Rishi Sunak also confirmed that the Royal Air Force conducted targeted strikes against military facilities used by Houthi rebels in Yemen, calling it “limited, necessary and proportionate action in self-defence.”

Rishi Sunak said the UK will always stand up for “freedom of navigation and the free flow of trade.” He stated that the Houthis, despite the repeated warnings from the international community, continue to conduct attacks in the Red Sea, including against UK and US warships just this week.

Yemen’s Houthis have launched several drone and missile attacks at Israel, with most intercepted, since the war started. The Israel-Hamas war began on October 7, after thousands of Hamas terrorists crossed the border and killed scores of Israelis.

The Houthi rebels, who are supported by Iran, started the strikes in retaliation for Israel’s Gaza conflict. The Houthis have said that they will not stop attacking until Israel ends the hostilities in Gaza.