Oil and gas prices rise as BP stops Red Sea shipments

Oil and natural gas prices rose sharply on Monday after BP said it would pause all shipments through the Red Sea because of increased attacks on commercial vessels by Houthi militants in Yemen, a media report said.

The decision by one of the world’s biggest oil companies follows similar moves by major shipping firms, something analysts have warned could ripple through global supply chains and increase the costs of moving goods, CNN reported.

Oil posted steep gains on the news. Brent crude, the global benchmark, was up 2.7 per cent at $78.68 a barrel. US oil also rose 2.7 per cent to $73.38 a barrel.

The news also affected the natural gas market.

Europe’s benchmark natural gas prices surged more than 9 per cent to above €36 ($39.65) per megawatt hour. That’s still just a fraction of the all-time high of €320 ($349.24) per megawatt hour seen in August 2022, at the height of the continent’s energy crisis, but still the most concrete sign yet of disruption in commodity markets following the attacks.

Aerial attacks by the Iran-backed Houthis, who support the Hamas and the Palestinian people, have become more frequent since the outbreak of the Israel-Hamas war. The group has claimed the attacks as revenge against Israel.

The United States and its allies are now considering whether to expand an existing maritime taskforce in the Red Sea to protect commercial vessels, CNN reported.