Oil prices extend gains as Red Sea attacks disrupt supply chains

Oil prices advanced on Tuesday, extending gains from the previous session, as attacks by Yemen’s Iran-aligned Houthi militants on ships in the Red Sea disrupted maritime trade and forced companies to reroute vessels.

Brent crude futures rose 17 cents, or 0.2%, to $78.12 a barrel at 0112 GMT. The front-month U.S. West Texas Intermediate crude futures contract, which expires on Tuesday, rose 14 cents to $72.61 a barrel. The more active second-month contract rose 9 cents, or 0.1%, to $72.91.

Both benchmarks rose more than 1% on Monday on concerns about shippers diverting vessels away from the Red Sea.

Oil major BP temporarily paused all transits through the Red Sea and oil tanker group Frontline said on Monday its vessels would avoid passage through the waterway, signs the crisis was broadening to include energy shipments.

About 15% of world shipping traffic transits via the Suez Canal, which connects the Red Sea to the Mediterranean Sea, offering the shortest shipping route between Europe and Asia.

The shipping attacks have prompted the United States and its allies to discuss a task force that would protect Red Sea routes, a move that U.S. and Israeli arch-foe Tehran has warned would be a mistake.
In Iran, Oil Minister Javad Owji on Monday confirmed a nationwide disruption to petrol stations was caused by a cyberattack. A hacking group that Iran accuses of having links to Israel claimed it carried out the attack which disrupted services at petrol stations across the country on Monday, Iranian state TV and Israeli local media reported.

Meanwhile, the United States will push shippers to disclose more information about their Russian oil dealings in a bid to enforce sanctions, U.S. officials said on Monday, while acknowledging that a big chunk of the trade has already escaped Western oversight after Russia built a parallel fleet.