Crude oil futures are rising as the situation in the Middle East warms

The crude oil futures are rising because of concerns about the warming of the situation in the Middle East. As the United States expands its military strikes against Iranian targets and Iran attacks on neighbouring Gulf States, crude oil futures recorded double-digit increases this week. Another factor contributing to the warming is the possible action by the Yemeni Al-Houthi forces to block Red Sea shipping, which Saudi Arabia has been diverting from its crude oil exports to the Red Sea in the context of the closing of the Strait of Hormuz. In a report, Barclay Analyst Amarpreet Singh states: “As stocks are at their lowest level in recent years and most of the strategic oil reserves released have ended, the situation surrounding the Strait's `red line' is warming again, posing a significant upward risk to energy prices. In the present situation, we believe that the possible impact of the oil market on stocks remains too minor.”