Oil Prices Rise Amidst Fresh Attack on Vessel at Red Sea
Crude oil prices increased in the global market on Monday as escalating clashes between Russia and Ukraine fuelled supply concerns. Also fuelling the rally is heightened tensions with the Yemeni Houthi group ballistic missile attack on an Israeli vessel off the Red Sea coast.
Brent crude was trading at $67.66 per barrel, up 0.4% from the previous close of $67.37. US benchmark West Texas Intermediate (WTI) rose 0.6% to $64.11 from $63.73 in the prior session. German Chancellor Friedrich Merz said he sees little chance of a diplomatic breakthrough between Russia and Ukraine, warning that the conflict could drag on for an extended period.
In an interview with public broadcaster ZDF, Merz reaffirmed that despite US President Donald Trump’s efforts to end the war, Russian President Vladimir Putin’s recent actions demonstrate his lack of interest in negotiations.
“I don’t see that happening on either side at the moment, either. So I am preparing myself mentally for the fact that this war could go on for a long time. We are trying to end it as quickly as possible. But certainly not at the price of Ukraine’s surrender,” Merz said.
Expectations of a prolonged conflict have intensified supply concerns, adding upward pressure on crude prices. On Friday, 26 EU member states condemned Russia’s attacks on Ukrainian cities, including Kyiv, and said they were expediting work on a 19th package of sanctions.
Anticipation that these measures will hit Russian oil producers and exporters is fueling concerns over global supply and supporting prices. Meanwhile, bets on a Fed rate cut in September continue to underpin crude, with investors expecting a lower-rate environment to spur economic growth and boost oil demand.
However, gains were capped by demand worries linked to Trump’s tariff threats and expectations that eight OPEC+ members will increase production. Anticipation of higher output from OPEC+—including Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman—has raised concerns about potential oversupply ahead of Sunday’s meeting.
Despite US tariff hikes on Indian imports of Russian oil from 25% to 50%, effective August 27, experts still expect Russian exports to India to rise, keeping downward pressure on prices in check.
Red Sea Attack
The Yemeni Houthi group said Monday that it had launched a ballistic missile attack on an Israeli vessel off the Red Sea coast. Military spokesman Yahya Saree said in a statement that a ballistic missile targeted Israeli oil tanker Scarlet Ray in the northern Red Sea.
He said the ship was directly hit by the Houthi missile. There was no immediate comment from the Israeli army on the Houthi claim, or information about damage or injuries.
The United Kingdom Maritime Trade Operations (UKMTO) reported a projectile attack earlier Monday on a Liberia-flagged, Israeli-owned tanker near Yanbu, Saudi Arabia.
No injuries were reported, and the vessel continued its voyage, UKMTO said. Monday’s attack came days after Houthi Prime Minister Ahmed Ghalib Al-Rahawi and several ministers were killed in an Israeli strike on the Yemeni capital Sanaa on Thursday.
Following the attack, the Houthi group vowed to continue its missile and drone strikes against Israeli targets in support of Palestinians in the Gaza Strip.
Since November 2023, the Houthis have launched missile and drone strikes on Israeli targets and targeted commercial shipping in the Red Sea, Gulf of Aden and Arabian Sea in support of Palestinians in Gaza, where nearly 63,500 people have been killed in an Israeli genocidal war. #Oil Prices Rise Amidst Fresh Attack on Vessel at Red Sea Crude Oil Theft Committee Targets 3mbpd Output- Uzodimma
