Rolling coverage of the latest economic and financial news
The oil price has rallied this morning after a missile attack by Houthi rebels on a fuel tanker in the Red Sea on Friday.
The energy markets are also on edge after three US soldiers were killed in a drone attack on a US service base on the border of Jordan and Syria.
The Houthis’ continued attacks on ships in the Red Sea, including a tanker carrying Russian fuel, have prompted ongoing U.S. airstrikes in Yemen. Iran’s actions risk inviting a more robust U.S. air campaign against its regional assets, highlighting the precariousness of the situation and the potential for further escalation.
Concerns about the risk of miscalculation are growing, as rational actors may unintentionally become entangled in an escalatory spiral. Given the inherent complexity of Middle East conflicts, achieving a stable outcome in the region appears unlikely at this stage, signalling the potential for continued instability with broad global repercussions where higher oil prices are the chief concern, especially in a severe supply disruption scenario, where maritime traffic in the Strait of Hormuz is chocked leading to significant rise in prices.
