2024-01-02 16:06:17
Oil prices rose on Tuesday, driven by increased geopolitical risk and fears of potential supply problems after an Iranian ship entered the Red Sea, the scene of attacks on boats. Around 1 p.m. Paris time, the price of a barrel of Brent from the North Sea, for delivery in March, rose 2.15%, to $78.70. Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in February, gained 2.18%, to $73.21.
The price of oil is climbing “due to the prospect of an escalation in geopolitical tensions after an Iranian warship was spotted entering the Red Sea”, comments Pierre Veyret, analyst at ActivTrades. The Iranian warship Alborz entered the Red Sea through the Bab al-Mandeb Strait, local media reported on Monday, in a context of tensions on this strategic route, scene of repeated attacks by Yemen’s Houthis against merchant ships which they consider linked to Israel.
Investors fear “disruptions or supply problems”
“This decision risks fueling tensions and complicating the objective of United States to secure the waterway”, underline DNB analysts. Allies of Israel, the United States patrol the area with other countries within an international coalition to protect maritime traffic from attacks by Houthis: “The Red Sea attacks and the increase in geopolitical risk are thus pushing the two oil benchmarks, with investors fearing disruptions or supply problems,” explain DNB analysts.
At the same time, voluntary production cuts by certain members of the Organization of the Petroleum Exporting Countries and their allies (OPEC+), decided at the end of November, came into force in January, also providing support for prices. On the European natural gas side, the Dutch TTF futures contract, considered the European benchmark, was trading on Tuesday at 31.78 euros per megawatt hour (MWh), down 1.8%. Gas demand remains low due to unseasonably mild winter temperatures, and Europe benefits from comfortable stock levels.
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