The oil prices have started to rise as the Yemen-based Houthi militia, which is backed by Iran, has continued to carry out attacks on ships in the Red Sea.
The price of Brent Crude Oil, a European benchmark used for global market purchases, has risen by around 2.5% since Sunday amid continuing Houthi attacks on ships in the Red Sea and ship operators suspending operations.
The oil prices have started to rise as the Yemen-based Houthi militia, which is backed by Iran, has continued to carry out attacks on ships in the Red Sea.
Oil prices have risen by more than 2 per cent since Monday when global energy major BP announced its suspension of transit of all cargo through the Red Sea.
Several major commercial shipping companies have also announced that they have suspended transit through the Red Sea.
The announcement of BP and others come as Houthis, which rule over large swathes of Yemen, continue to launch drones and missiles on ships in the Red Sea. Around 8 per cent of the world's crude oil passes through the waterway and it is a crucial to global energy supplies. The Houthis are attacking ships as part of its opposition to the Israel's War on Gaza.
The price of Brent Crude Oil, a European benchmark used for global market purchases, has risen by around 2.5 per cent since Sunday, according to MarketWatch. The spike in price was reported shortly after BP announced the suspension of transit through the Red Sea "in light of the deteriorating security situation for shipping".
While initially Houthi militia, which function under the name of 'Ansar Allah (Partisans of God)', was targeting Israel-linked ship, not it appears they have dropped that consideration, according to The Hill newspaper.
"It appears their most recent attacks last week began to hit vessels with no clear ties to Israel, however, prompting concerns from major shipping companies that use the Red Sea as a vital corridor for cargo and energy shipments," noted The Hill.
The Hill further reported that the following major shipping companies have scrapped transit through the Red Sea: Norway-based oil tanker group Frontline said it has started Red Sea and the Gulf of Aden, Hapag-Lloyd announced last week it would pause all traffic in Red Sea until Monday, and other majors A.P. Moller-Maersk, MSC, and the CMA CGM Group have also said last week they have suspended operations in the Red Sea.
For the freedom of the navigation in Red Sea, the United States on Monday announced 'Operation Prosperity Guardian', a multinational naval force that would safeguard the shipping in the region amid continuing Houthi attacks.
"Operation Prosperity Guardian is bringing together multiple countries to include the United Kingdom, Bahrain, Canada, France, Italy, Netherlands, Norway, Seychelles and Spain, to jointly address security challenges in the southern Red Sea and the Gulf of Aden, with the goal of ensuring freedom of navigation for all countries and bolstering regional security and prosperity," said US Secretary of Defense Lloyd Austin in a statement.