- The Iranian conflict intensifies and the Houthis launch attacks against Israel.
- Analysts point to concerns over Saudi exports from the Red Sea.
- Iran accuses US of plans for ground assault amid proposals for talks.
Oil prices extended gains on Monday, with Brent heading for a record monthly rise, after Yemen’s Houthis launched their first attacks on Israel over the weekend, widening the US-Iran war on Iran in the Middle East.
Brent crude futures jumped $3.09, or 2.74 percent, to $115.66 a barrel at 2353 GMT after settling up 4.2 percent on Friday.
US West Texas Intermediate was at $102.56 a barrel, up $2.92, or 2.93%, after a 5.5% gain in the previous session.
Brent has soared 59% this month, the largest monthly gain, surpassing gains seen during the 1990 Gulf War, after the Iranian conflict effectively closed the Strait of Hormuz, a channel for a fifth of the world’s oil and gas supplies.
The war, launched on February 28 with US and Israeli strikes on Iran, has spread across the Middle East, with Yemen’s Iran-aligned Houthis launching their first attacks on Israel since the conflict began on Saturday, sparking concerns over shipping lanes around the Arabian Peninsula and the Red Sea.
“The conflict is no longer concentrated in the Persian Gulf and around the Strait of Hormuz, but now extends to the Red Sea and Bab el-Mandeb, one of the world’s most crucial chokepoints for flows of crude and refined products,” JP Morgan analysts led by Natasha Kaneva said in a note.
Saudi crude exports redirected from the Strait of Hormuz to the Red Sea port of Yanbu reached 4.658 million barrels per day last week, according to data from analytics firm Kpler.
If Yanbu exports were disrupted, Saudi oil would have to pivot to Egypt’s Suez-Mediterranean (SUMED) pipeline to the Mediterranean, JP Morgan analysts said.
Attacks in the region intensified over the weekend and damaged Oman’s Salalah crossing despite efforts to begin ceasefire talks.
Iran said it was prepared to respond to a US ground attack, accusing Washington on Sunday of preparing a ground attack even as it sought to negotiate.
Pakistani Foreign Minister Ishaq Dar said they discussed possible ways to quickly and permanently end the war in the region, as well as possible US-Iran talks in Islamabad.
