Oil prices boost gains as Red Sea attacks disrupt supply chains According to Reuters

© Reuters. An aerial view shows an oil tanker at an oil terminal off Waidiao Island in Zhoushan, Zhejiang province, China January 4, 2023. China Daily via REUTERS/File Photo

By Stephanie Kelly

(Reuters) – Oil prices rose on Tuesday, extending gains from the previous session, as attacks by Yemen’s Houthi militants on a ship in the Red Sea disrupted maritime trade and forced companies to divert vessels.

Futures were up 17 cents, or 0.2%, at $78.12 a barrel at 01:12 GMT. U.S. West Texas Intermediate crude futures, which expire on Tuesday, rose 14 cents in the first month to $72.61 a barrel. The more active second-month contract rose 9 cents, or 0.1%, to $72.91.

Both benchmarks rose more than 1% on Monday on concerns about shippers diverting vessels from the Red Sea.

Oil major BP (NYSE: ) temporarily suspended all Red Sea transits and oil tanker group Frontline (NYSE: ) said on Monday its vessels would avoid transiting the waterway, suggesting the crisis is extending to energy supplies.

About 15% of the world’s shipping passes through the Suez Canal, which connects the Red Sea to the Mediterranean and offers the shortest shipping route between Europe and Asia.

The ship attacks prompted the United States and its allies to discuss a task force to protect routes in the Red Sea, a move that US and Israeli arch-foe Tehran warned would be a mistake.

In Iran, Oil Minister Javad Owji confirmed on Monday that the nationwide disruption of gas stations was caused by a cyber attack.

A hacking group that Iran accuses of having links to Israel claimed to have carried out an attack that disrupted service at gas stations across the country on Monday, Iranian state television and Israeli local media reported.

Meanwhile, the United States will press shippers to release more information about their Russian oil trades in an effort to enforce sanctions, US officials said on Monday, while acknowledging that much of the trade has already escaped Western scrutiny after Russia built a parallel fleet. .