Oil price news: Oil advances as Iran warship in Red Sea ratchets tensions higher
BNN Bloomberg
Oil rose in New Year trading after Iran sent a warship into the Red Sea, escalating Middle East tensions, and as the outlook for Chinese crude demand brightened.
Brent crude climbed more than two per cent to near US$79. The deployment of an Iranian warship comes after the U.S. Navy said it was fired upon when responding to a distress call from a vessel in the Red Sea, the latest flashpoint on the key maritime corridor over the past few weeks. Defense and shipping stocks were also trading higher on Tuesday.
Attacks on merchant shipping in the region have led to diversions of everything from container ships to gas carriers. The most recent impact on for oil came as two crude tankers diverted away from loading in Sudan, though one was replaced by a different vessel. Still, even as some companies and shipowners stay away, the wider impact on supply has been contained for now.
Geopolitics threatens to inject fresh impetus into an oil market that last year fell for the first time since 2020. As 2024 gets underway, there’s been close focus on supply as high output from the U.S. and other producers outside of OPEC and its allies counters the cartel’s output curbs.
