The war with Iran begun by the United States and Israel is becoming a regional conflict, with Houthi forces in Yemen, allied with Iranian forces, have now dealt some serious blows to Saudi oil supply lines. The Houthis have attacked and damaged Saudi Arabia’s East-West pipeline, which was an alternative to Persian Gulf export routes, and have also now closed the Bab el-Mandeb Strait to Saudi oil shipments.
You can see the intraday spike to nearly $104/barrel for WTI crude in response to the news on the chart below.
The latest Houthi aggressions toward Saudi Arabia and the kingdom’s proxies in Yemen are a continuation of long running attempts to frustrate Saudi operations. Summer Said and Saleh al-Batati report in The Wall Street Journal:
Even before last week’s offensive, Houthi attacks on Saudi shipping in the Red Sea were forcing the kingdom to toggle back and forth between dangerous export routes there and in the Strait of Hormuz.
That has taken a toll on the kingdom’s oil output. Saudi crude exports via its main Red Sea port dropped to around 2.5 million barrels a day in August from 4.6 million barrels a day in July, according to the International Energy Agency.
The amount of oil the kingdom pumped fell to six million barrels a day in August compared with an average of around 9.4 million barrels a day last year, the agency said.
Read more here.
