- Iran sends destroyer to waterway as US navy sinks Houthi boats
- Brent declined 10% last year, its first annual drop since 2020
Oil rose after Iran sent a warship to the Red Sea in response to the US Navy’s sinking of three Houthi boats over the weekend, adding to regional tensions as ships continue to avoid the key waterway.
Brent crude climbed to around $78 a barrel after declining by 5% over the prior three sessions, with West Texas Intermediate above $72. The US Navy said it was fired upon when responding to a distress call from a vessel in the Red Sea, resulting in the sinking of the three boats. In response, Iran’s Alborz destroyer entered the vital waterway on Monday, state media said.
Crude’s gains follow the first annual decline since 2020, after a tumultuous year dominated by concerns over increasing production outside OPEC+ and slowing demand growth. That was offset by bullish factors including the wars in Gaza and Ukraine, and signs that the Federal Reserve is done raising interest rates.
A Houthi delegation met with officials in Tehran after the US response to the attack on a Danish-owned container ship. AP Moller-Maersk A/S has again suspended all Red Sea transit to assess the situation in the vital waterway.
The latest cuts from the Organization of Petroleum Exporting Countries and its allies will take effect this quarter, which could then be extended further. Traders had earlier shrugged off the latest Nov. 30 pledge from OPEC+ to slash production further, remaining skeptical of its implementation.
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