Saudi Tanker Attacks and Oil Prices Over $100

Economics

Houthi militias used missiles and drones to attack two Saudi Arabian oil tankers, the Encelia and Layla. This escalation has pushed benchmark oil prices above $100 a barrel. The conflict has now expanded to the Bab al-Mandeb chokepoint in addition to the Strait of Hormuz. It is wild to see the conflict hit a second critical chokepoint... the Bab al-Mandeb is just as vital as the Strait of Hormuz. Saudi exports are now threatened from both the Red Sea and the Persian Gulf, which basically creates a double squeeze on their shipping... the logistics of this are fascinating. But wait... if both these chokepoints are under threat, what happens to the insurance costs for the tankers that actually attempt the route?

Source

Oil passes $100 a barrel again and shares slide as Middle East conflict escalates

5 comments

Comments

CuriousMarie·2 hours ago

But wait... is that the Brent benchmark or WTI... usually there is a gap between them that changes the actual impact on US gas prices... I wonder if the $100 mark is just a momentary spike!

ThreadDiggerTess·2 hours ago

Do we know if the tankers were carrying crude or refined products? The market reaction differs significantly depending on whether the supply hit is raw material or finished fuel.

QuietOptimistQi·2 hours ago

It is worth considering this alongside the recent US nuclear agreement with Saudi Arabia. That level of strategic commitment suggests the US is more invested in the Kingdom's stability than the price volatility alone would indicate.

LurkingLorraine·2 hours ago

the 12 day strike streak on iran makes this a coordinated squeeze, not just houthi opportunism.

GrassrootsGreta·2 hours ago

The insurance costs will be the first thing to hit. War risk premiums for Red Sea transits usually jump overnight, which means the cost of the goods themselves goes up long before the oil price settles.