Oil prices hit six-week high as Middle East supply disruption fears grow

[00:00:00]Global oil prices are at their highest levels since early June because of disruptions in the Strait of Hormuz.

[00:00:08]Brent crude is trading above $95 a barrel. And on the other side of the Arabian Peninsula, oil tankers made U-turns in the Red Sea after threats by Yemen's Ansar Allah Houthis to target the Bab el-Mandeb Strait.

[00:00:23]Well, the strait links the Indian Ocean to the Mediterranean Sea by way of the Gulf of Aden.

[00:00:29]Rather, it links the Red Sea to the Gulf of Aden.

[00:00:35]At its narrowest point between Djibouti and Yemen, the Bab el-Mandeb Strait is about 29 km wide. Nearly 12% of global trade passes through the waterway, including 30% of global global container traffic. Disruptions there will force ships traveling between Asia and Europe to go around South Africa's Cape of Good Hope, adding significant time and cost.

[00:01:02]Let's go live to Youssef Mawry in Yemen's capital. He joins us from Sana'a. So, Youssef, first of all, let's start with what is actually happening on the seas. Are we seeing the Houthi announcement take effect at this point?

[00:01:24]>> Precisely so. I think when you have the oil tankers turning away from Bab el-Mandeb, being refused access by the Ansar Allah Houthis, it only shows that these oil companies, these nations attempting to ship to Saudi Arabia or whether Saudi Arabia's exporting oil, they know very well that if they attempt to violate the ban on Saudi Arabian maritime navigation, then they could be susceptible to targeting of, you know, with drones or ballistic missiles and hypersonic missiles. I think the the image that's on the mind of many of these traders is the fact that the Ansar Allah Houthis have sunk cargo ships and oil tankers in the past. Uh the the blockade that was imposed on on Israel that lasted for 2 years effectively uh led to the bankruptcy of the port of Haifa and the port of Eilat in southern Israel. And I think Saudi Arabia realizes this and they know very well that uh perhaps the uh only, you know, the best option is not to jeopardize the lives of the crew on board these vessels. Now, the big question is whether this ban only applies to outbound Saudi uh shipping. I've just spoken with an expert about an hour ago and he informs informs me that this navigation ban also applies to inbound and outbound shipments uh to or from Saudi Arabia. It's not just about the Saudi exports. It's not just about attacking the uh Saudi oil revenue. It's also about preventing any shipment from any other nation uh to Saudi Arabia. The The Houthi warning makes no distinction of a ship's flag or origin.

[00:03:19]This is all based on whether the uh their shipping that attempts to load or unload at any Saudi ports. Uh that's the sole trigger in this maritime ban against all Saudi navigation. And as I mentioned, this is uh a matter that's being taken seriously by Saudi authori- authorities. It's also being taken seriously by nations who trade with Saudi Arabia. And I think now uh people and nations and cargo companies are just waiting to see how serious the Yemeni group is about imposing a blanket ban on all types of Saudi trade, whether that's in its oil industry or any products, any containers that are being shipped to to Saudi Arabia. They're also going to be targeted according to the statement and according to Ansar Allah Houthi officials.

[00:04:14]>> All right, that's Yousef Mawry for us from Sana'a. Thank you so much.