Oil Prices Surge As Tensions Escalate In Red Sea: Iran Seizes US-Controlled Tanker

Oil prices witnessed a sharp 2.5% increase to over $74 per share in early New York trading on Thursday following the seizure of a tanker by Iran off the coast of Oman.

The St Nikolas, previously seized by the U.S. for carrying Iranian oil, was transporting Iraqi crude to Turkey when Iran detained it, possibly as a retaliatory act, as Reuters stated.

Chart: Oil prices Surged On Jan.11 Amid Red-Sea Disruptions

The St Nikolas incident is the latest in a series of regional disruptions, including Houthi militia strikes on Red Sea shipping, heightening concerns over maritime security.

The U.S. and U.K. naval forces on Wednesday countered a significant Houthi attack in the Red Sea, indicating escalating military engagement in the area.

U.S. Secretary of State Antony Blinken has warned of repercussions if such attacks continue, highlighting Iran’s support for the Houthis.

The UKMTO reported an armed boarding near Oman, adding to the security crisis. The US Navy’s Fifth Fleet has not provided further details.

The UN Security Council condemned the attacks on shipping, demanding the Houthis cease their actions and release the captured Galaxy Leader ship and its crew. Notably, Algeria, China, Mozambique and Russia abstained from the resolution.

Bloomberg reported the European Union is considering a new naval operation in the Red Sea to ensure security and freedom of navigation amidst ongoing Houthi attacks.

Following the events, the United States Oil Fund ETF USO rose 3.1% to $68.63.

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