Oil Prices Rise Amid Middle East Tensions

Oil prices saw an increase early Monday as fears of supply disruption heightened due to tensions in the Middle East. According to officials, a U.S. jet fighter successfully shot down a cruise missile fired by Houthi rebels in Yemen towards an American destroyer in the Red Sea. This incident adds to the ongoing conflict in the region, where global ships traveling through this crucial route have been targeted.

Impact on Shipping and Trade

The Red Sea serves as a vital shipping route, responsible for handling 12% of global trade and 21% of containership traffic. Located at its north end is Egypt’s Suez Canal. The recent unrest has affected major shipping lines including Maersk, CMA CGM, and Hapag-Lloyd, leading to significant reactions in their stock prices.

Rise in Oil Prices

The international benchmark for oil, Brent crude, rose by 1.2%, reaching $77.34 per barrel on Monday. Similarly, West Texas Intermediate, the U.S. standard, rose by 1.3%, reaching $71.73 per barrel. These increases contribute to the overall positive performance of oil prices, with both benchmarks showing growth since the beginning of the year.

QatarEnergy Considers Alternative Routes

QatarEnergy, one of the world’s largest liquefied natural gas exporters, is seeking security advice regarding the continuation of its tankers’ routes through the Red Sea. Over the weekend, at least four of their tankers were disrupted, leading the company to temporarily halt their passage through the region. If QatarEnergy decides to reroute its tankers around the Cape of Africa instead, it would result in a nine-day longer journey and increased costs.

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