Saudi Airstrikes Drive Oil Prices Up
24 April 2015 14:10 WIB
TEMPO.CO, Jakarta - Global oil prices escalated on Thursday, April 23, 2015, as the Saudi Arabia-led coalition extend their airstrikes in Yemen, triggering new concerns about the availability of oil supply in the Middle East.
US benchmark West Texas Intermediate (WTI) gained a US$1.58 price increase and currently set at US$57.74 per barrel for June shipment on the New York Mercantile Exchange, according to the AFP news agency.
Meanwhile, the Brent North Sea for June shipment gained a US$2.12 increase and currently sits on a level of US$64.85 per barrel in the London trade.
"The market may be drawing support from Saudi Arabia's resumption of airstrikes against Houthi rebels in Yemen, with an increased geopolitical risk helping to offset weaker-than-expected PMI data from both China and the eurozone," said Tim Evans of Citi Futures.
Previously, the Saudi-led regional alliance had declared to end the airstrikes against the Iran-backed Houthi rebels and their allies on Tuesday, April 21, 2015. However, the alliance vowed to keep striking them with targeted bombings when necessary.
Yemen is not a major oil-manufacturing country, but the country’s coast is part of the Bab el-Mandeb Strait, which is the key strategic entry point into the Red Sea where around 4.7 million barrels of oil are being delivered each day by ships headed to or from the Suez Canal.
"Increased instability around the Bab el-Mandeb [strait] could keep tankers in the Persian Gulf from reaching the Suez Canal or the Sumed Pipeline, diverting them around the southern tip of Africa, adding to transit time and cost," the US Department of Energy warned in a report Thursday, April, 23, 2015.
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