Oil prices spike to highest level since October 2023

Oil prices saw sizable rises during the week ending April 5 as geopolitical tensions in the Middle East and Europe triggered supply fears.

International benchmark Brent crude traded at $90.86 per barrel at 1.30 p.m. local time (1030 GMT) on Friday, 3.9% higher than the closing price of $87.48 on the last trading day of the week on Thursday, as markets were closed for Good Friday and Easter Monday.

West Texas Intermediate (WTI), the American benchmark, traded at $86.69 a barrel at the same time on Friday, for a rise of about 4.2% from last Thursday’s session that closed at $83.17 per barrel.

Oil prices spiked as the conflict between Israel and Palestine and the Russia-Ukraine war continued to put global energy supply routes at risk.

Israel is continuing its relentless onslaught despite a UN Security Council resolution demanding an immediate cease-fire in the besieged enclave.

Rising hostilities in the Red Sea, one of the world’s busiest maritime routes for oil and fuel shipments, due to Iran-backed Houthi attacks on commercial ships suspected of ties to Israel in solidarity with Gaza, continue fueling supply fears.

Abdulmelik al-Houthi, the leader of Yemen’s Houthi group, said Thursday that over the past three months, his group had recorded 424 raids and naval shelling by the US and UK on Yemen.

Al-Houthi noted that his group has so far targeted 90 Israeli, American and British ships and vowed to continue its military operations in the Red Sea and Arabian Sea.

The US and the UK have yet to comment on Al-Houthi’s statement.

These developments supported higher oil prices by raising concerns about further supply disruptions in the Middle East, where the majority of global oil reserves are located.

Furthermore, the OPEC+ group’s stance at its meeting on Wednesday to leave its oil output policy unchanged ensured a tight supply outlook in the short term in favor of higher pricing.

Meanwhile, the ability of Russian oil refineries to process oil at full capacity in the short term following the wave of Ukrainian drone attacks since March has flagged concerns of a decline in the country’s oil export capacity, also driving up prices.

Given that 65% of market players anticipate a rate decrease from the US Federal Reserve in June, a decline in the value of the US dollar against foreign currencies is to be expected. If this bears out, oil purchases are likely to be cheaper for other currency holders, and the ensuing surge in trading is set to bolster prices.

• American benchmark
• West Texas Intermediate (WTI)