Finance12 August, 20262 min read
Houthi Attacks Escalate in Bab Al-Mandab, Driving Brent Crude to $89.63
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Brent hits $89.63 as Houthi attacks threaten Red Sea shipping. Two vessels attacked raise shipping disruption risk in Bab al-Mandeb.
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Crude jumps on attacks
Oil prices rose as attacks on commercial shipping escalated, with Brent crude futures up 72 cents to $89.63 per barrel by 0053 GMT and U.S. West Texas Intermediate up 71 cents to $83.91 per barrel.
Reuters said the United States and the Yemen-based Houthi movement announced two separate attacks on vessels on Tuesday as prospects for ending the Iran war appeared to be diminishing.
In the Bab al-Mandab Strait, the Yemeni Ministry of Transport said four members of a crew on a small cargo ship were killed, and the Yemeni Coast Guard reported the death of two Yemeni rescuers belonging to a military group opposed to the Houthis.
The same Reuters report tied the market move to renewed pessimism about a quick resolution, saying oil prices rose and global stocks fell as the conflict showed no signs of ending despite assurances from U.S. President Donald Trump that a deal was near.
Hormuz conditions harden
Iran’s top security official Mohsen Rezaei said the Hormuz Strait would remain closed unless the United States accepts Iran’s terms for ending the war, including releasing Iranian assets frozen abroad and ending wars in the region, including Lebanon and Gaza.
Reuters also quoted Rezaei saying the Hormuz Strait would remain closed unless Washington accepts Iran’s terms, framing it as the strongest signal yet that the waterway will not reopen soon.
In a separate market-focused account, Zee Business said Iran has maintained that the strait will remain closed until its demands are addressed, and it linked the price move to uncertainty over a possible US-Iran peace deal and fresh attacks on two ships.
Zee Business added that Pakistan’s defence minister said Washington and Tehran were "close to some sort of arrangement" regarding the Strait of Hormuz, while it said optimism was offset by tougher comments from U.S. President Donald Trump.
India markets feel the hit
In India, MillenniumPost reported that benchmark indices Sensex and Nifty ended lower on Tuesday as a sharp rally in crude oil prices due to geopolitical uncertainties dented investors’ sentiment, with the 30-share BSE Sensex dropping 388.19 points to settle at 78,154.25 and the 50-share NSE Nifty declining 112.10 points to end at 24,471.70. MillenniumPost said Ajit Mishra, SVP, Research, Religare Broking Ltd, warned that markets traded under pressure as Brent crude moved towards the USD 90 per barrel mark as hopes of an early US-Iran agreement faded.
Zee Business connected the crude surge to the Indian currency, saying the Indian rupee weakened for the second consecutive session on Tuesday, falling 14 paise to close near 95.44 against the US dollar. Zee Business also described the stakes for investors as the market watched whether Brent could sustain levels above USD 90, warning that if tensions around the Strait of Hormuz persist, crude could remain elevated and create pressure on India’s import bill, inflation and the rupee.