Because of the ongoing tension in the Red Sea, weekly increases in oil prices seem inevitable

 Because of the ongoing tension in the Red Sea, weekly increases in oil prices seem inevitable

At 14:45 GMT, Brent oil futures increased by 92 cents, or 1.2%, to $80.31 a barrel.

Although Angola's decision to exit OPEC prompted concerns about the group's ability to sustain prices, oil prices increased on December 22 as tensions in the Middle East continued after Houthi assaults on ships in the Red Sea.

At 14:45 GMT, Brent oil futures increased by 92 cents, or 1.2%, to $80.31 a barrel.

At $74.91 a barrel, US West Texas Intermediate (WTI) oil futures saw a $1.02 or 1.4% increase.

With growing geopolitical concerns as a result of the assaults in the Red Sea and possible interruptions to shipping operations, both Brent and WTI futures were expected to rise by more than 4% week over week.

Because of the Houthi terrorist group's assaults on ships, which it claims are retaliation for Israel's war in Gaza, more maritime vessels are steering clear of the Red Sea.

Furthermore, big shippers Maersk and CMA CGM said on December 22 that they would charge extra for vessel diversions.

Around 12% of global commerce passes via the Suez Canal, which has been disrupted by the assaults.

"The direct disruption in availability is not the only reason oil prices are rising owing to the Red Sea situation; freight rates as well as insurance costs are rising, along with proxy war premiums," PVM analyst John Evans stated in reference to the disruption's effects.

Even though oil prices were supported by global concerns, they saw a daily decrease on Thursday due to Angola's announcement that it was quitting OPEC.

With an estimated daily output of 1.1 million barrels of oil, the African country claimed that its participation in the organization was not serving its interests. It also criticized the decision made by the larger OPEC+ group to lower Angola's production quota for 2024. have been in opposition.

"This course of action was foreseeable given Angola's attitude at the last OPEC meeting, yet it brings to the fore emerging fractures in minds that could jeopardize unity going upwards," PVM's Evans said.