Recently, the war between Israel and Palestine has disrupted the international supply chain. The most affected trade is the oil trade, which has been uncertain since the war started. To add to the trade disruption, oil prices rose $2 per barrel on Tuesday to $78.12. The reason for this is the ongoing war and the fact that Libya also reduced its production.
Moreover, some shipping companies are avoiding sailing their ships in the Red Sea due to the recent pirate activities in the region. A militia by the name of Yemini Houthi has been terrorising the sea and targeting trade ships as a way to show their support for Palestine and condemn Western countries. Israel has made it clear that the conflict can last for all of 2024, which only makes the rates of oil even more unpredictable.
This comes after both Brent and WTI crude oil incurred losses of 3% and 4%, respectively, on Monday, following sharp cuts by the Saudis and the OPEC+ group. However, Saudi showed keen interest in stabilising markets on Tuesday by allowing oil to enter the market. If Saudi does this, the chances of the oil market stabilising will increase significantly. Moreover, the war also presents a tough situation for the West Asian and Western countries. U.S. Secretary of State, Anthony Blinken told the Israeli leader that there is still a chance of acceptance from their Arab neighbours if Israel shows a clear path to a viable Palestinian state.
