Middle East crisis Oil market

Oil price rises after attack – has surged 30 percent in July

Oil prices continue to rise and a barrel of Brent crude oil costs just over $96 this morning, the highest level in six weeks. Bloomberg writes.

During the night, the Houthi rebels in Yemen said they had attacked two Saudi oil tankers in the Red Sea.

– If this route is disrupted, the pressure on the oil market will only worsen, says Daniel Hynes, commodities strategist at ANZ Group, to the news agency.

Oil prices have risen more than 30 percent this month and analysts believe the price could rise to over $100 later this year if the situation in the Middle East does not stabilize.

Analysis: Houthi blockade could hit oil prices hard

The Houthi blockade of the Bab al-Mandeb Strait could not have come at a worse time, writes CNN's economics editor David Goldman. If the rebels' threats are carried out, a whole new front will be created in the Iran war, a front that may require military intervention, he says.

On Thursday, the price of a barrel of Brent oil reached over $96 per barrel, but it could rise further soon, Goldman predicts. Millions of barrels of oil are shipped every day through the Bab al-Mandeb Strait to the important Southeast Asian market.

Since the outbreak of the war, large quantities of oil have been shipped this way via the port city of Yanbu on the west coast of Saudi Arabia, an opportunity that is now at risk of being closed. If that were to happen, Goldman believes that the price of oil could rise ten percent in one fell swoop.

A major oil crisis has so far been avoided by a number of countries increasing their oil production while China has reduced its purchases.

“However, supplies are expected to be limited until this winter as European buyers will need to replenish their stocks,” writes The Guardian’s energy correspondent Jillian Ambrose, referring to the International Energy Agency, IEA.