Even after the US and other countries attacked the Houthi group in Yemen to make it possible to ship through the Red Sea again, new attacks occurred recently. This had massive impacts on the oil prices and the geopolitical risks for suppliers. The hope was that the attacks will stop after the US fought back to the group.
The massive rise of oil prices
A ship of the trading giant Trafigura Group was hot by a missile about 55 miles southeast of Yemen. After that a lot of refined products are at a two-month high. With oil, diesel and gasoline is effected. West Texas Intermediate rose the price for a barrel to $78. That is the highest price since November 2023. After investors were optimistic the situation in the Red Sea might change the overall feelings of investors.
The impact on investors
The price of crude oil has risen by around 6% this week, the highest level since the start of the war in Israel and Gaza. This is good news for investors with a bullish view on Crude, but for everyone else it means ever increasing prices for oil, petrol and diesel. After the US attacked the Houthi group and forced them to stop attacking commercial shipping in the Red Sea, this is a massive setback for the economy.
Oil in general rose 8% in January. This came on the back of Chinese policymakers’ efforts to support the US economy and a drawdown in US inventories. There is also a slowdown in supply from OPEC, which has also pushed up oil prices, as well as slowing demand from some countries and slower growth from major importers. One of these importers is India, for example. This is a further setback for the situation in the Red Sea and for oil prices, so there has to be a solution to both problems soon.
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