Oil surged on Friday as an increasing number of oil tankers diverted course from the Red Sea following overnight air and sea strikes by the US and Britain on Houthi targets in Yemen.

The US and UK strikes added to market concerns about the Israel-Hamas war widening into a broader conflict in the Middle East affecting oil supplies from the region.

Oil prices are up by 2% on Friday with Brent and WTI trading at USD 79 and 73 per barrel, as the US and the UK carried out counter-attacks against the Houthi movement shooting down several onshore targets, drones and anti-ship missiles, Maersk Broker reports.

Russia’s seaborne crude exports in the beginning of 2024 adhered to the pledge of cutting their exports as part of the wider OPEC+ attempt to reduce global oil supply.

Around 3.4 mbpd of Russian crude were exported since the start of the new year, down by around 120k bpd from December.

Danish shipbroking firm Maersk Brokers explains that while the Baltic freeze is likely to have limited shipments in this period, around 30 vessels of both laden ice class tankers and gas carriers are heading to the Baltics from other European shipping regions, with tonne-days from Russian Baltic ports steadily climbing.

Both US and UK are weighing the options for retaliation against the many Houthi attacks on vessels transiting the Red Sea to dissuade further escalation of the conflict in the Middle East.

The escalation has fuelled market concerns about the Israel-Hamas war widening into a broader conflict in the Middle East affecting oil supplies from the region.

Last week the oil tanker St. Nikolas was reported seized by Iranian officials in response to more than 980,000 barrels of oil seized by the US last year. The US government seized the allegedly Iranian oil, that was bound for another country.

The vessel was ordered to sail to Iran following its seizure in the Gulf of Oman, a move likely to stoke regional tensions.

The semi-official news agency in Iran Tasnim news agency, cited a statement from the Iranian Navy saying the seizure followed an order from an Iranian court.

The news agency ran a brief story acknowledging the seizure by Iran’s navy. It said the seizure came as a result of a judicial order.