Crude oil prices rallied sharply on Wednesday as traders assessed mounting supply risks stemming from geopolitical tensions in the Middle East. According to OilPrice, Brent crude surged 3.75% to $94.42 per barrel, while U.S. West Texas Intermediate (WTI) climbed 3.69% to $87.45, driven by concerns over disruptions to major shipping chokepoints in the region.
The gains reflected intensifying worries about the Bab el-Mandeb Strait, a critical waterway for crude exports from major producers. Reports indicated that Iran-aligned Houthi forces have signaled intentions to attempt blockading the passage, which would threaten shipments from Saudi Arabia's Red Sea port of Yanbu. Combined with existing concerns over the Strait of Hormuz, another vital conduit for Middle Eastern oil, the dual supply risks have prompted investors to reassess their exposure to crude markets.
The price movement underscores the vulnerability of global energy supplies to regional instability. With roughly one-third of seaborne oil transiting through the Strait of Hormuz and significant volumes passing through Bab el-Mandeb, any sustained disruption could reverberate through energy markets worldwide and complicate crude supply for refineries across the globe.