Oil prices held steady on Tuesday after the holiday break, thereby building on last week’s weekly gain. Oil embarked on its largest weekly gain in the past two months after Houthi attacks on vessels in the Red Sea led to shipping disruptions and detours.
US benchmark West Texas Intermediate crude neared $74 per barrel on Tuesday morning, while global benchmark Brent gained over 3% to exceed $79 per barrel. While recent crude gains have helped to curb a quarterly decline, crude remains on course for an 8% loss since the start of the year.
“Energy supply chains will face yet another round of upheaval,” analysts at S&P Global Market Intelligence said of the Red Sea debacle. “Alternative routings are compromised either practically or economically,” the analysts continued, which includes a rerouted delivery via the Cape of Good Hope, thereby extending delivery times by 10 days.
