Oil prices were poised for weekly increases on Friday, following Houthi assaults on tankers in the Red Sea, which raised concerns about the potential closure of a second significant shipping chokepoint. Additionally, Kazakhstan has temporarily reduced its oil output due to the shutdown of its primary export route.
As of 0126 GMT, Brent crude futures dipped by 72 cents, or 0.72%, reaching $99.97 per barrel, yet remained on track for a substantial weekly gain of 13.5%. Meanwhile, West Texas Intermediate (WTI) futures fell by 70 cents, or 0.76%, to $91.49 per barrel, positioning themselves for a 10.9% rise over the week.
On Thursday, Brent experienced a 7% increase, while WTI rose by 6.2%, marking the first instance since May that Brent settled above the $100 mark, following claims by the Iran-aligned Houthis that they had targeted two Saudi oil tankers in the Red Sea.
The surge in prices was largely fueled by fears that these attacks could lead to the closure of the Bab el-Mandeb shipping lane, which is crucial for passage from the Red Sea to the Indian Ocean and ranks as the second most vital oil route after the Strait of Hormuz.
In response to the situation, U.S. President Donald Trump stated his intention to “hold Iran responsible” for any further incidents.
The Houthis announced on Monday their plan to establish a naval blockade against Saudi Arabia, which has been rerouting its oil through pipelines to circumvent Iran’s blockade of the Strait of Hormuz.
Iran had previously been urging the Houthis to shut down the Bab el-Mandeb if the U.S. continued its assaults on Iranian power facilities, following the breakdown of a temporary ceasefire between the nations two weeks prior.
IG market analyst Tony Sycamore commented, “The pressure on global energy supply routes is intensifying once again.”
In a related development, Kazakhstan’s energy ministry reported that oil companies had temporarily scaled back production after suspected drone strikes from Ukraine forced the closure of the country’s main export terminal on the Black Sea.
According to industry sources, the Caspian Pipeline Consortium halted its acceptance of Kazakh oil due to the suspension of loadings resulting from tanker attacks at the terminal, which accounts for approximately 2% of the world’s daily crude supply.
While Kazakhstan’s energy ministry did not disclose the extent of the production cuts, one insider indicated that output from the nation’s largest oil field had been reduced by more than 50%.
