Commodities
Home›Commodities›Energy›Oil prices turn lower as risk shifts to two Middle Eas…
Oil prices turn lower as risk shifts to two Middle East chokepoints
Standard Chartered said the selloff could be temporary because market risk has widened from one chokepoint to two, as Houthi actions threaten shipping through Bab el-Mandeb and the Strait of Hormuz remains a separate concern.
Oil prices pared gains on Friday after reports that Pakistan is trying to broker a return to U.S.-Iran nuclear negotiations, with China backing the effort as the ongoing conflict and the closure of the Strait of Hormuz continue to threaten energy security and pressure its economy, according to OilPrice citing Standard Chartered.
Brent crude for September delivery fell 4.4% to $96.36 per barrel at 1.35 pm ET, while WTI crude for September delivery was down 3.6% to $88.86 per barrel.
Standard Chartered said the latest pullback may prove temporary because Middle East oil market risk has expanded from one strategic chokepoint to two. It pointed to the Bab el-Mandeb Strait becoming a new focal point after Yemen's Houthi militants imposed a targeted maritime blockade against Saudi Arabia, warning they would block Saudi-linked vessels from transiting the strait.
After the threat, multiple Saudi-linked very large crude carriers rerouted around Africa’s Cape of Good Hope, adding up to two weeks to voyages. Two days later, the Houthis followed through with attacks that included ballistic missiles and drones targeting Saudi oil tankers, further rattling markets.
Latest closeWTI crude $90.47 ▼1.9%|Brent $98.38 ▼2.3%