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BP suspends all shipments via the Red Sea due to Houthi attacks.



BP suspends all shipments via the Red Sea due to Houthi attacks.

Oil prices were little changed on Tuesday, with investors keeping an eye on the impact on oil supplies after attacks by Iran-aligned Houthi militants in Yemen on ships in the Red Sea disrupted maritime trade and forced companies to reroute vessels.

Brent crude futures were up 6 cents at $78.01 a barrel at 07:26 GMT. The first-month West Texas Intermediate (WTI) crude futures contract, which expires on Tuesday, fell 18 cents to $72.29 a barrel. The more active second-month contract fell 10 cents, or 0.1%, to $72.72.

"Given that there has been a swift collective response from several countries to mitigate the attacks, this may not provide much conviction that the disruptions could be long-lasting and this has led to some reservations reflected in oil prices in today's session," said Jun Rong Yeap, a market strategist at IG in Singapore.

Both benchmarks rose by over 1% on Monday on concerns about shippers diverting vessels from the Red Sea.

Oil major BP has temporarily suspended all transits via the Red Sea, and oil group Frontline said on Monday that its vessels would avoid using the waterway, a sign that the crisis was spreading to energy shipments.


Around 15% of the world's maritime traffic passes through the Suez Canal, which links the Red Sea to the Mediterranean, providing the shortest shipping route between Europe and Asia.

However, analysts at Goldman Sachs said that the disruption of energy flows in the Red Sea is unlikely to have a significant impact on crude oil and liquefied natural gas (LNG) prices, as ships can be redirected.

"We estimate that a hypothetical prolonged redirection of all 7 million barrels per day of crude oil flows (north and south) would increase spot crude prices relative to long-term prices by $3-4 per barrel," the analysts said.

The maritime attacks prompted the United States and its allies to discuss the creation of a task force to protect the Red Sea routes, a move that Iran believes would be a mistake.

In Iran, Oil Minister Javad Owji confirmed on Monday that a nationwide disruption to service stations had been caused by a cyber attack.


A group of hackers that Iran accuses of having links with Israel claimed to have carried out the attack on Monday that disrupted services at service stations across the country, Iranian state television and local Israeli media reported.

Meanwhile, the U.S. will push shippers to disclose more information about their oil transactions with Russia in order to enforce sanctions, U.S. officials said Monday, while acknowledging that much of the trade has already escaped Western scrutiny after Russia built a parallel fleet.