Saudi Arabia and Yemen's Houthis exchanged fresh cross-border strikes on Thursday as fighting spread through the Red Sea region, adding a new threat to global oil supply already strained by the war between the United States, Israel and Iran. Crude prices eased slightly but held above $100 a barrel, while U.S. diesel prices hit a fresh record.
Fighting spreads across the Saudi-Yemen border
Houthi-controlled television reported fresh Saudi air strikes on Thursday in Hajjah province near the Red Sea coast and around Taiz further inland. Saudi Arabia's civil defence said a Yemeni resident in Saudi Arabia was killed by debris from a drone intercepted over Taif, the first death Riyadh has announced since the fighting escalated last week. It had previously said more than 80 people were wounded.
The Houthis have seized Yemen's entire Red Sea coast since last week in what Reuters described as a lightning advance, and say the Saudi Air Force has conducted hundreds of airstrikes in recent days. On Wednesday, the group said it had shot down a Saudi F-15 fighter jet. According to Reuters, Houthi leader Abdul Malik al-Houthi said in a televised speech that Riyadh must end its blockade and occupation of Yemen: "This is our demand!"
More than 100,000 Yemenis have been displaced by the latest fighting, mostly within Yemen, according to the International Organization for Migration. Some have fled by boat across the Bab el-Mandeb Strait to Djibouti as Houthi forces swept into coastal villages.
Oil supply routes under pressure
The spread of the war to Yemen and Saudi Arabia threatens to worsen a global energy supply shortage that has persisted since the United States and Israel attacked Iran in February. Crude prices eased slightly on Thursday but remained well above $100 a barrel after shooting to their highest levels since May. In the United States, the average retail price for diesel set a new all-time record, just shy of $6.40 a gallon.
The U.S. Navy is trying to guide ships through the Strait of Hormuz, the outlet along Iran's coast through which a fifth of global oil and liquefied natural gas passed before the war, while also enforcing a blockade of Iranian ports. Iran says the strait is closed and will stay shut until Washington lifts the blockade. It is seeking an agreement with Gulf states to collect fees from ships passing through the strait.
Fighting in Yemen and attacks on Saudi Arabia have also jeopardised the main alternative route for crude oil exports, as the Houthis have captured the Red Sea coast and islands inside the Bab el-Mandeb strait. Saudi Arabia's East-West Pipeline, which let it pump oil across the Arabian Peninsula and ship it from the Red Sea, has been shut since it was struck last week in an attack Riyadh said came from Iraq, where Iran-backed militias also operate.
Trump says war may be nearing its end
President Donald Trump has so far rebuffed pleas from the Saudis for military support against the Houthis, who agreed a ceasefire with the United States last year after Washington bombed the group for two months. Trump told reporters on Wednesday that he hopes the war is nearing its end, adding that Iran wants to make a deal. No negotiations between the United States and Iran to end the war have been held since an interim agreement reached in June collapsed within weeks.
Source: Investing.com
Trading involves risk.
Risk Disclaimer
