Red Sea Ship Explosion May Hit Oil Prices
Another Houthi militant rocket attack on a ship in the Red Sea has hit an oil tanker. That means the odds of oil companies using the route have gone from low to zero. According to Bloomberg, “Shipping and freight executives believe the Red Sea will remain too dangerous for many more months, if not the rest of the year putting some upwards pressure on energy markets.” Alternative routes add two weeks to the transit.
Climate News –The Destruction Of Smaller Storms
Oil prices have settled at $86 to $79 a barrel. Supply remains robust because of American production and what is viewed as a slowing of the Chinese economy. However, this balance could be broken at any moment. The Red Sea problem is one of three.
Arab Tensions
Heightened geological problems between Israel and Arab neighbors could break into a full-blown war at any moment. Iran, in particular, has exchanged attacks with Israel. Iran is among the world’s largest oil exporters.
As Ukraine has lost ground to Russian invaders, it has picked up rocket attacks on Russian oil assets. Russia is the second largest producer of oil in the world. Much of this goes to China and India. Damage to Russia’s facilities would sharply curb supply to two of the world’s largest importers.
The trouble in the Red Sea appeared to settle down. Suddenly, that is not the case.
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