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Brent crude oil broke past the $80 resistance level on Wednesday, as tensions in the Middle East continued to rise and as Houthi attacks on Red Sea shipping showed no signs of easing, prompting concerns of price-impacting disruptions to the energy trade.
At 10:38 a.m. ET on Wednesday, Brent was trading at $80.20, up 1.22% on the day, while West Texas Intermediate (WTI) was trading at $74.96, up 1.38% on the day.
On Tuesday, Brent grabbed another 1% price hike when companies began to divert vessels away from the Red Sea, while the U.S. announced the deployment of a task force to guard Red Sea shipping lanes.
Yemen’s Iran-backed Houthis have signaled they will not change course from their attacks, despite Washington’s task force.
The Houthis have launched at least 100 attacks on commercial vessels in the Red Sea in the past four weeks, targeting 12 separate vessels using ballistic missiles and drones.
The attacks have escalated in tandem with Israel’s assault on Gaza.
The U.S.-led international task force to protect the Red Sea was launched on Tuesday, with nine other nations joining in what has been dubbed “Operation Prosperity Guardian”. The UK, Bahrain, Canada, France, Italy, the Netherlands, Norway, Seychelles and Spain have signed on to the task force.
Doubt remains as to whether the task force will be able to halt Houthi attacks in the future.
"There's going to be a whole lot of hardware in the Red Sea now, naval hardware, not just from the United States, but other ships from other nations to counter these threats," ABC news quoted White House spokesperson John Kirby as saying on Tuesday. "So let's see where it goes."
The increase in oil prices has been somewhat muted, however, due to rising U.S. oil production, which threatens the OPEC+ cartel’s influence over markets.
The latest forecast from the Energy Information Administration (EIA) shows U.S. producers pumping out almost 13.5 million barrels per day last month, exceeding the agency’s year-ago prediction by a million barrels.
The Toronto Stock Exchange (TSX) likewise saw a rise in energy stock values gaining, though the exchange itself overall remained flat in trading.
By Josh Owens for Oilprice.com
Josh Owens is the Content Director at Oilprice.com. An International Relations and Politics graduate from the University of Edinburgh, Josh specialized in Middle East and…