The renewed Red Sea volatility comes as Axios reports that Israeli officials believe Donald Trump would authorize pre-emptive military action against Iran’s nuclear program if he returns to office. Israeli Prime Minister Benjamin Netanyahu is expected to raise the issue during a closed-door dinner with Trump this week. Tehran has restarted centrifuge operations at key enrichment sites, setting off fresh alarm in Tel Aviv.
The United Kingdom Maritime Trade Operations website reported that “The vessel has been engaged by multiple small vessels who have opened fire with small arms and self-propelled grenades. Armed Security Team have returned fire and situation is ongoing. Authorities are investigating. Vessels are advised to transit with caution and report any suspicious activity to UKMTO.”
Crude oil physical markets in Europe and Africa have weakened in response to peak refinery maintenance and extra supply from the United States and Saudi Arabia, dampening the impact of Red Sea shipping delays, according to traders, flows data and analysts.
India’s inflation and economic growth are at risk from the rise in oil prices caused by disruptions in the Red Sea, the government said, highlighting the need to diversify trade routes.
Prices for North Sea and West African crude grades have increased this month.
The Red Sea shipping crisis and OPEC+ output cuts have tightened oil markets.
U.S. benchmark oil prices are also supported by higher demand for American crude in Europe due to the Red Sea disruption to flows.
Disruptions to shipping in the Red Sea and via the Suez Canal are raising the prices of African and U.S. crude grades.
Brent crude sees stronger backwardation.
Analysts expect drawdowns in global stocks this month and next to support oil prices.
The inertia of oil prices during the Red Sea oil crisis has made oil traders complacent.
Fears of an escalation of the Israel-Hamas war have subsided amid talks about a ceasefire.
The rerouting of oil tankers directly increases oil demand—by around 200,000 bpd so far.
Threat of Houthi attacks is causing exports to Asia to be rerouted via the southern tip of Africa.
Oil prices jumped 1 percent on Monday on fuel supply concerns after a missile struck a Trafigura-operated fuel tanker in the Red Sea and as Russian refined products exports are set to fall as several refineries are under repair after drone attacks.
India, the world’s third-biggest oil importer, gets a bulk of its Russian supplies made up over 35% of India’s total crude imports in 2023, amounting to 1 .7 million barrels per day.