Oil Prices Remain Above $100 Amid Red Sea Attacks and Kazakhstan Supply Disruptions
Just weeks after a decline in crude prices, oil has rebounded sharply, driven by renewed fears over global supply disruptions. Recent attacks on Saudi oil tankers in the Red Sea and production cuts in Kazakhstan have pushed prices above the $100-a-barrel mark. On Friday, Brent crude futures fell 63 cents to $100.10 a barrel, while US West Texas Intermediate (WTI) crude slipped 69 cents to $91.50 a barrel. Despite these declines, Brent is on track for a 13.5% weekly gain, while WTI is set to rise 10.9%.
Red Sea Attacks Shake Oil Markets
The recent price surge follows attacks by Iran-aligned Houthi rebels on two Saudi oil tankers in the Red Sea. These incidents have raised concerns about potential disruptions to the Bab el-Mandeb shipping route, a critical passage for global oil transport. Earlier this week, the Houthis declared a naval blockade on Saudi Arabia, which had been using pipelines to circumvent Iran’s closure of the Strait of Hormuz.
Iran has urged the Houthis to close the Bab el-Mandeb gateway in response to US military actions against Iranian infrastructure. US President Donald Trump stated he would hold Iran accountable for any further attacks and warned of significant military retaliation against the Houthi rebels if they continued their assaults on shipping.
Kazakhstan Adds to Supply Concerns
In addition to the tensions in the Red Sea, Kazakhstan has contributed to supply worries. Oil companies in the country have temporarily reduced production following suspected Ukrainian drone attacks that led to the closure of its main Black Sea export terminal. The Caspian Pipeline Consortium has halted oil receipts from Kazakhstan due to these disruptions, impacting about 2% of global daily crude supply.
While Kazakhstan’s energy ministry has not disclosed the extent of the production cuts, sources indicate that output at the country’s largest oilfield has been reduced by more than half. This situation marks a stark contrast to a few weeks ago when Brent crude prices had dipped below $72 a barrel amid hopes for easing tensions in the region.
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