Oil prices hit 5-month highs with supply concerns amid geopolitical tension

By Zeynep Beyza Kilic

Oil prices reached their highest level since October 2023, supported by geopolitical tension fueling concerns about global supply disruptions.

International benchmark Brent crude traded at $90.83 per barrel at 10.57 p.m. local time (0757 GMT), a 0.20% rise from the closing price of $90.65 per barrel in the previous trading session.

The American benchmark West Texas Intermediate (WTI) traded at $86.58 per barrel at the same time, a 0.01% decline from the previous session that closed at $86.59 per barrel.

Attacks in the Red Sea, one of the world's most frequently used sea routes for oil and fuel shipments, continue to influence oil prices.

As a show of support for Gaza, which has been under Israeli attack since October 7 of last year, the Houthis have begun pursuing cargo ships in the Red Sea that have connections to Israel. Concerns over disruptions to the world's supply chain are fueling price increases.

The US destroyed an anti-ship missile launched by Yemen's Houthi group in the Red Sea, the United States Central Command (CENTCOM) said Thursday.

"CENTCOM is dedicated to protecting the freedom of navigation and making international waters safer and more secure for Coalition and merchant vessels," it added.

The leader of Yemen's Houthi group said Thursday that American and British airstrikes on his country since January have killed 37 people and injured 30 others.

According to Abdulmelik al-Houthi, the leader of the Houthis, 90 ships belonging to Israel, the US and the UK have been targeted in the Red Sea, Oman Sea and Indian Ocean since November 2023.

Because 65% of market participants predict that the US Federal Reserve will cut interest rates in June, the US dollar is projected to weaken relative to other currencies. If this bears out, oil purchases are likely to be cheaper for other currency holders, and the ensuing surge in trading will bolster prices.