Oil Prices Surge as Coalition Strikes Houthi Rebel Targets in Yemen

Late Thursday, U.S. and British forces spearheaded the strikes with the support of Australia, Bahrain, Canada, and the Netherlands. The coalition's main aim was to disrupt the Houthis' capacity to endanger global trade in the Red Sea.

In a statement from the White House, U.S. President Joe Biden emphasized his commitment to taking further measures to safeguard both the well-being of Americans and the uninterrupted flow of international commerce if necessary.

As a direct consequence of these developments, Brent crude, the benchmark for international oil prices, registered a notable increase of 2.4% to reach $79.25 per barrel in early Friday trading. Similarly, West Texas Intermediate, the U.S. standard, rose by 2.6% to reach $73.86 per barrel.

The decision to initiate these strikes was prompted by a series of attacks on vessels transiting the Red Sea that have been attributed to the Houthi rebels. Moreover, on Thursday, Iran's navy confirmed that it had seized an oil tanker off the coast of Oman, heightening concerns throughout the region.

Amidst these developments, the primary apprehension revolves around the potential escalation of violence in the Middle East, especially given the ongoing tensions fueled by the Israel-Hamas conflict. Notably, both Iran and Saudi Arabia are major oil producers, with previous incidents involving Houthi rebels targeting Saudi Arabian oil infrastructure.