Oil prices rose sharply on Monday, with Brent crude crossing the $110 mark and WTI surpassing $100 a barrel, as the conflict in the Middle East ended its first month.
Markets remained on edge as the Houthis entered the Iran war and US plans to expand its ground presence in the region, adding to uncertainty about the course of the war.At around 7 a.m. EDT, Brent crude oil was at $116.4 a barrel, up 3.84, or 3.41%, after rising more than 4% in the previous session on Friday. West Texas Intermediate crude followed higher, jumping to $103.1, up 3.44 or 3.45%, after posting a 5.5% gain last week.
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Since the beginning of this month, Brent has risen 59%, recording its largest monthly rise and surpassing the gains it achieved during the 1990 Gulf War.
The increase comes after Iran tightened its noose on the Strait of Hormuz, effectively disrupting the important strategic route through which about a fifth of the world’s oil and gas supplies pass.The conflict, which began on February 28 with US and Israeli strikes on Iran, has spread throughout the Middle East. Over the weekend, Yemen’s Iran-aligned Houthis carried out their first attacks on Israel since the start of the war, raising further concerns about key shipping lanes in the Arabian Peninsula and the Red Sea.
The United States also strengthened its military presence in the Middle East, with about 3,500 Marines and sailors deployed aboard the US warship USS Tripoli to the region.
US Central Command confirmed the move, which is described as the largest US military buildup there in nearly two decades. This comes after nearly a month of conflict involving Iran, and is seen as part of Washington’s efforts to expand its operational options in the region.Meanwhile, according to Kpler data cited by Reuters, Saudi crude exports redirected from the Strait of Hormuz to the Red Sea port of Yanbu reached 4.658 million barrels per day last week.JPMorgan analysts said that if exports from Yanbu are disrupted, Saudi oil flows may be forced to shift towards Egypt’s Suez-Mediterranean (SUMED) pipeline to the Mediterranean.Tensions escalated in the region over the weekend after attacks destroyed Salalah station in Oman, despite continued attempts to advance ceasefire discussions.Iran said that it is ready to respond to any American ground attack, accusing Washington of planning a ground attack while continuing negotiations at the same time.Meanwhile, Pakistani Foreign Minister Ishaq Dar said that efforts were discussed on possible ways to achieve an early and lasting end to the conflict, along with possible talks between the United States and Iran in Islamabad.