Brent crude briefly slipped below the mark of $90 a barrel, falling as much as 7% in early trading before recouping some of the losses. West Texas Intermediate, or the US crude variant also fell towards the $80 a barrel mark, and is down around 4%.
Oil prices have tumbled after the US has not announced any new attacks on Iran for the last two days, after 13 straight nights of bombings. Iran too, has not carried out any retaliatory or escalatory strikes against the gulf nations that house US assets, particularly Kuwait and Bahrain.
The market, for now, is ignoring claims from the Iran-backed Houthis that they struck facilities linked to Saudi Aramco in the Red Sea port towns of Jizan and Yanbu on Saturday. Neither Saudi Arabia nor Aramco have officially confirmed this claim.
However, Saudi authorities did issue emergency warnings for both Jazan and Yanbu shortly after 6 AM local time, but the warnings ended soon after.
Yanbu has become a key focal point for Saudi oil exports since the open-close status of the Strait of Hormuz. Jizan is the site of an Aramco oil refinery, in addition to the port.
Despite this recent price correction, Brent crude prices are up over 20% so far this month, as the conflict spread beyond the Strait of Hormuz and spilt into the Red Sea. The Iran-backed Houthis announced a maritime embargo for Saudi Arabia for their attack on Yemen’s capital Sana’a. Brent’s technical indicators had also entered “overbought” territory, prompting a cool-off from $100-plus a barrel levels.
The market is also not yet taking note of Ukraine’s attack on an Iranian commercial vessel in the Caspian Sea, with Ukrainian President Volodymyr Zelenskyy stating that Ukraine achieved very strong results with long-range strikes in the Caspian Sea, including vessels used in military cargo shipments involving Iran, as well as a warship. Iran has lodged a protest against Ukraine with regards to the attack.
