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Image source: zerohedge
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Brent
and WTI added more than 4 percent after Saudi Arabia and its allies launched a
military operation in Yemen against Shiite Houthi rebels. Saudi Arabia is the
biggest oil supplier in the region, and southern Yemen is home to many LNG
hubs.
WTI
shot up more than 6.43 percent to US$52.38 per barrel, and Brent climbed to US$59.71,
a 5.72 percent increase at 11:00 am Moscow time. Saudi Arabia and nine allied
countries began airstrikes at 11 pm GMT, deploying a total of 70 fighter jets.
RT.com reports:
The
Saudi ambassador to the US said the airstrikes were launched to “defend
the legitimate government” of President Abdrabbuh Mansour Hadi, who
fled Aden by boat on Wednesday after a massive attack by Iranian-backed Shia
rebels. Hadi relocated to Aden from Sanaa after the capital city was overran by
the Shia Houthi rebels in September.
An
all-out conflict in the Middle East with the US backing one side and Iran the
other, has oil traders very bullish on crude prices.
Although
Yemen isn’t a major hydrocarbon producer, the Gulf state has an extensive
shoreline that hosts some of the world’s most strategic shipping routes.
More than 3.4 million
barrels of oil per day, including significant amounts of Saudi oil, flow
through the Strait of Bab el-Mandab, which links the Red Sea with the Gulf of
Aden and the Arabian Sea, according to the US Energy Information
Administration, which has identified the waterway as a “transit
chokepoint.”
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