Oil Prices Rose By 1% Due To Drop In Russian Exports And Red Sea Problems

On Monday, there has been an increase in oil prices by 1% in Asian trade. This is due to lower exports from Russia and attacks by Houthis on ships in the Red Sea. These factors led to rising concerns leading to disruption of oil supply.

The Oil prices of Brent Crude futures climbed by 60 cents (0.9%) to $77.24 per barrel (by 0037 GMT).  On the other hand, the price of US West Texas Intermediate crude climbed by 65 cents (0.9%) to $72.08 per barrel.

According to various experts, the bad weather in Russia also played a big part in the increase in prices. Furthermore, the attack by Houthis on ships close to Yemen also created a disruption in the transfer of oil.

CNBC reports –

“Russia said on Sunday it would deepen oil export cuts in December by potentially 50,000 barrels per day or more, earlier than promised, as the world’s biggest exporters try to support global oil prices. This comes after Moscow suspended about two-thirds of loadings of its main export grade Urals crude from ports due to a storm and scheduled maintenance on Friday.”

Some of the biggest shipping firms, like MSC and A.P. Moller-Maersk, also added that they would avoid the Suez Canal. This is also due to the higher presence of Houthi militants and their attacks on commercial vehicles in the Red Sea.

However, Bab al-Mandam still remains one of the most important commercial sea routes, particularly for the transfer of fuel and crude oil from the Gulf to the West. Commercial ships take the Red Sea, go through the Suez Canal, and finally end up in the Mediterranean Sea. In some cases, they also take the SUMED pipeline and end up in the Red Sea if they are going towards Asia.

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