- The Iran conflict escalates, the Houthis launch attacks on Israel.
- Analysts flag concern over Saudi Arabian exports from the Red Sea.
- Iran accuses US of plotting ground attacks amid offer of talks.
Oil prices extended gains on Monday, with Brent on course for a record monthly gain after Yemeni Houthis over the weekend launched their first attack on Israel, widening the US-Israeli war with Iran in the Middle East.
Brent crude futures rose $3.09, or 2.74%, to $115.66 a barrel. barrel at 2353 GMT after settling 4.2% higher on Friday.
US West Texas Intermediate was at $102.56 per barrel, up $2.92, or 2.93%, after rising 5.5% in the previous session.
Brent is up 59% this month, the steepest monthly jump, surpassing gains made during the 1990 Gulf War, after the Iran conflict effectively closed the Strait of Hormuz, a conduit for a fifth of the world’s oil and gas supplies.
The war, which began on February 28 with US and Israeli attacks on Iran, has spread across the Middle East, with Yemen’s Iran-aligned Houthis on Saturday launching their first attack on Israel since the start of the conflict, raising concerns about shipping routes 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 into the Red Sea and Bab el-Mandeb – one of the world’s most crucial choke points for commodity and refined product flows,” JP Morgan analysts led by Natasha Kaneva said in a note.
Saudi crude oil exports diverted from the Strait of Hormuz to the Red Sea port of Yanbu reached 4.658 million barrels per day last week, data from research firm Kpler showed.
If exports from Yanbu were disrupted, Saudi oil would have to turn to Egypt’s Suez-Mediterranean (SUMED) pipeline to the Mediterranean, JP Morgan analysts said.
Attacks in the region escalated over the weekend, damaging Oman’s Salalah terminal despite efforts to initiate ceasefire talks.
Iran said it was prepared to respond to a US land strike and accused Washington on Sunday of preparing a land strike even as it sought talks.
Pakistan’s Foreign Minister Ishaq Dar said they had covered possible ways to bring an early and permanent end to the war in the region, as well as potential talks between the US and Iran in Islamabad.
