- The conflict with Iran intensifies and the Houthis launch attacks against Israel.
- Analysts point out their concern about Saudi exports from the Red Sea.
- Iran accuses US of ground attack plans amid offers of talks.
Oil prices extended gains on Monday, with Brent heading for a record monthly rise, after the Yemeni Houthis launched their first attacks on Israel over the weekend, expanding the US-Israel war with Iran in the Middle East.
Brent crude futures rose $3.09, or 2.74%, to $115.66 a barrel by 2353 GMT, after closing up 4.2% on Friday.
US West Texas Intermediate was trading at $102.56 a barrel, up $2.92 or 2.93%, following a 5.5% gain in the previous session.
Brent has soared 59% this month, the steepest monthly jump, surpassing gains seen during the 1990 Gulf War, after the conflict with Iran effectively closed the Strait of Hormuz, a conduit for a fifth of the world’s oil and gas supplies.
The war, launched on February 28 with US and Israeli strikes against Iran, has spread across the Middle East, with Yemen’s Iran-aligned Houthis launching their first attacks on Israel since the start of the conflict on Saturday, raising concerns about sea routes around the Arabian Peninsula and the Red Sea.
“The conflict is no longer concentrated in the Persian Gulf and around the Strait of Hormuz, but now extends to the Red Sea and Bab el-Mandeb, one of the world’s most crucial bottlenecks for flows of crude oil and refined products,” JP Morgan analysts led by Natasha Kaneva said in a note.
Saudi crude exports rerouted from the Strait of Hormuz to the Red Sea port of Yanbu reached 4.658 million barrels per day last week, data from analytics firm Kpler showed.
If Yanbu exports were disrupted, Saudi oil would have to be directed toward Egypt’s Suez-Mediterranean (SUMED) pipeline to the Mediterranean, JP Morgan analysts said.
Attacks in the region intensified over the weekend, damaging Oman’s Salalah terminal despite efforts to begin ceasefire talks.
Iran said it was ready to respond to a US ground attack, accusing Washington on Sunday of preparing a ground assault even as it sought negotiations.
Pakistani Foreign Minister Ishaq Dar said they had covered possible ways to soon and permanently end the war in the region, as well as possible talks between the United States and Iran in Islamabad.
