(London) Oil prices rebounded on Wednesday after the closure of a major oil field in Libya due to protests, amid concerns about tensions in the Red Sea and their potential consequences on the supply of black gold.
Around 11:30 a.m. (Eastern time) (4:30 p.m. in Paris), the price of a barrel of North Sea Brent, for delivery in March, rose 2.82%, to $78.03.
Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in February, climbed 3.03%, to 72.51 dollars, shortly after having slipped below the 70 dollar mark.
Prices are rebounding as “the closure of Libya’s largest oil field following protests has raised concerns about supplies,” says Axel Rudolph, an analyst at IG.
The Sharara oil field in western Libya has a production capacity of around 300,000 barrels per day.
“The tensions in the Red Sea have not yet had lasting consequences on prices, because oil exports from the Middle East have not been interrupted,” Giovanni Staunovo, analyst at UBS, told AFP.
But “even if the oil supply has not been affected”, “the nervousness is obvious”, underlines Tamas Varga, analyst at PVM Energy.
Yemeni Houthi rebels said on Wednesday they had carried out an “operation” against a ship from the French carrier CMA CGM in the Red Sea, in solidarity with Palestinians in the Gaza Strip.
In recent weeks, in the wake of the war between Israel and Hamas, Houthi rebels have increased attacks in the Red Sea and the Bab el-Mandeb Strait through which 12% of world trade passes.
The Houthis, supported by Iran, have warned that they will target, in solidarity with Gaza, ships sailing in the Red Sea and having links to Israel.
“Some shipping companies are now avoiding the relevant strait and instead taking a much longer route around the Cape of Good Hope,” explains Commerzbank analyst Carsten Fritsch, “which not only extends delivery times by 10 to 12 days, but also increases transportation and insurance costs.”
French shipping carrier CMA CGM announced the near doubling of its freight rates from January 15 for trade between Asia and the Mediterranean, due to Houthi attacks on merchant ships in the Red Sea.
Another potential sign of escalation of the conflict: a double explosion took place on Wednesday near the Saheb al-Zaman mosque, where the tomb of General Soleimani is located, in Kerman, in the south of Iran.
The attack was described as an attack by Iranian officials and state media, but there was no immediate claim of responsibility.
“If tensions continue to escalate, oil prices could be strengthened in the short term,” says FXTM’s Lukman Otunuga.
At the same time, members of OPEC (Organization of the Petroleum Exporting Countries) and their OPEC allies reaffirmed their “full commitment” to “market unity, cohesion and stability” in a press release published on the alliance’s website on Wednesday.
This is the group’s first official communication since Angola left OPEC last month, unhappy with its production quota decided at the alliance’s last ministerial meeting.