Oil prices largely maintained their previous gains on Tuesday, following attacks on shipping in the Red Sea that heightened concerns about the global oil supply. Brent crude futures experienced a marginal decline of 1 cent, settling at $82.52 a barrel by 0435 GMT, while U.S. West Texas Intermediate crude futures (WTI) saw a modest increase of 1 cent, reaching $77.59 a barrel.
The recent attacks, carried out by Iran-aligned Houthis in support of Palestinians, have contributed to disruptions in shipping routes, leading to elevated freight rates and extended shipping times. Analysts, such as Tony Sycamore from IG in Sydney, noted that these concerns have supported a rebound in crude oil prices, countering the impact of a more hawkish Federal Reserve affecting the demand side of the equation.
On Monday, U.S. Central Command reported an unsuccessful missile launch by the Houthis targeting the U.S.-flagged oil tanker Torm Thor in the Gulf of Aden on Feb. 24. The incidents in the Red Sea have added geopolitical tension to the already complex dynamics influencing oil markets.
In parallel developments, U.S. President Joe Biden expressed his hope for a ceasefire in the Israel-Hamas conflict in Gaza to commence by next Monday. However, public statements from Israel and Hamas continue to reflect significant differences on the potential terms of a truce, with each side blaming the other for delays in the negotiation process.
As the situation unfolds, global oil markets remain sensitive to geopolitical events and their potential impact on the oil supply chain, underscoring the intricate interplay between political developments and energy markets.
