Oil prices drift up after US launches naval force to guard shipping

Singapore — Oil prices ticked higher on Wednesday after rising more than 1% in the previous session on jitters over global trade disruption and geopolitical tensions in the Middle East after Houthi attacks on ships in the Red Sea.

Brent crude futures edged up 6c, or 0.1%, to $79.29 a barrel by 1.37am GMT while US West Texas Intermediate (WTI) crude was at $74.11 a barrel, up 17c, or 0.2%.

Washington on Tuesday launched a task force to safeguard Red Sea commerce as attacks by Iranian-backed Yemeni militants forced major shipping companies to reroute, stoking fears of sustained disruptions to global trade.

The Houthis vowed to defy a US-led naval mission and to keep targeting Red Sea shipping in support of Palestinian enclave Gaza’s Hamas movement.

About 12% of world shipping traffic passes up the Red Sea and through the Suez Canal. However, the effect on oil supply has been limited so far, analysts said, as the bulk of Middle East crude is exported via the Strait of Hormuz.

The US bought 2.1-million barrels of crude for delivery in February, its energy department said on Tuesday, bringing total purchases to about 11-million barrels as it continued to replenish the strategic petroleum reserve (SPR) after the largest sale in history in 2022.