Oil prices are about to log their biggest monthly rise on record following Houthi attacks on Israel and President Trump’s statement that he wants to take Iran’s oil. The international benchmark was set for a 59% increase since the start of March, Reuters said.
At the time of writing, Brent crude was trading at $115.52, after topping $116 per barrel earlier in the day in Asia following the news of the Houthi strikes. West Texas Intermediate was trading at $101.04 per barrel.
“The conflict is no longer concentrated in the Persian Gulf and around the Strait of Hormuz, but now extends into the Red Sea and the Bab el-Mandeb — one of the world’s most crucial chokepoints for crude and refined product flows,” JP Morgan analysts said in a note, as quoted by Reuters.
Bloomberg, meanwhile, cited President Trump as saying that Iran had agreed to most of the 15 points of a ceasefire plan the United States released last week. “They gave us most of the points. Why wouldn’t they?” the U.S. president told the media on Air Force One on Sunday. “We’re going to be asking for a couple of other things.” Trump did not specify the other things, but in an interview with the Financial Times, he said he wanted Iran’s oil.
The Yemeni Houthis’ involvement in the war has become the latest bullish factor for oil prices as they could add to supply disruptions by targeting tankers in the Red Sea, which has become Saudi Arabia’s main export conduit after the Strait of Hormuz closure. Per Kpler data cited by Reuters, the Saudis were exporting oil at a rate of 4.658 million barrels daily from the port of Yanbu.
If the Red Sea exports get disrupted, Saudi Arabia would have to redirect oil flows to the SUMED pipeline from the Suez Canal to Egypt’s Mediterranean coast, JP Morgan analysts warned. The pipeline has a capacity of 2.5 million barrels daily.
By Irina Slav for Oilprice.com