Oil Extends Five-Day Rally After Houthis Claim Attacks on Saudi-Flagged Tankers

Brent crude rose 1.7% to US$95.62 per barrel, while U.S. West Texas Intermediate (WTI) gained 1.5% to US$88.18 during Asian trading on Thursday, extending gains for a fifth consecutive session.

The move followed claims by the Houthis that they had targeted two Saudi-flagged tankers, Encela and Laylia, after accusing the vessels of violating what the group described as its maritime blockade.

Shipping disruptions remain in focus

Shipping market data indicate that crude movements through the Bab el-Mandeb Strait have slowed in recent weeks as some vessels adjust their routes in response to regional security concerns.

At the same time, heightened risks surrounding shipping through the Strait of Hormuz have increased attention on alternative export routes, including Saudi Arabia's Red Sea terminal at Yanbu. Some market analysts have said that simultaneous disruptions affecting both waterways could have significant implications for global energy supply, although the extent of any impact would depend on the duration of the disruptions.

U.S. inventories provide a counterbalance

According to the U.S. Energy Information Administration (EIA), commercial crude oil inventories increased by 2.0 million barrels to 411.7 million barrels during the week ended July 17, compared with market expectations for a decline.

Gasoline inventories rose 0.8 million barrels, distillate fuel inventories increased 1.4 million barrels, and total petroleum inventories climbed 11.6 million barrels.

Market focus

Investors are likely to continue monitoring developments affecting shipping through the Bab el-Mandeb and Strait of Hormuz, as well as changes in global crude inventories. Any prolonged disruption to shipping routes could increase freight and insurance costs and may eventually affect energy import costs, particularly across Asia.

Sources: Reuters, Investing.com, U.S. Energy Information Administration (EIA), The National and CNN Business. This article is for informational purposes only and does not constitute investment advice.