Oil prices in Asian trading ascended on Tuesday, making a modest recovery from the significant losses endured in 2023. This rise came in response to U.S. military actions against the Iran-backed Houthi group in the Red Sea, where tensions persisted without signs of de-escalation.
Over the New Year weekend, reports emerged of U.S. strikes that resulted in the demise of around 10 Houthi fighters and the sinking of three Houthi boats. This retaliation followed a series of attacks by the Houthis on numerous military and commercial vessels in the region.
The Houthis firmly stated their intent to sustain these strikes, citing them as retaliation for the Israel-Hamas conflict. Iran, too, rebuffed appeals to withdraw support for the group, deploying a warship into the Red Sea on Monday.
These developments in the region, particularly disruptions in shipping routes through the Suez Canal, had previously sparked some increases in oil prices earlier in December.
However, the final trading week of 2023 witnessed a decline in oil prices as a U.S.-led task force aimed at reinforcing security in the region encouraged more shipping firms to resume operations through the Suez Canal.
March’s Brent oil futures escalated by 1.2% to $77.94 a barrel, while West Texas Intermediate crude futures surged by 1.1% to $72.60 a barrel by 20:22 ET (01:22 GMT). Trading volumes remained subdued as major markets continued to observe closures for the New Year holidays.