TEHRAN: The price of global benchmark Brent crude oil rose nearly 6 percent at $58.96 a barrel from its closing price of $56.77.
Experts state that the crisis poses risks to the region, which is significant for oil production and exports in the world.
Oil prices moved sharply higher Thursday, before falling back, as Saudi Arabia conducts a military operation to its neighbor Yemen.
The American benchmark West Texas Intermediate, WTI, rose 7 percent to $52.44 per barrel, from $48.98 percent at closing Wednesday.
Bab el-Mandab is the fourth biggest choke point for oil in the world, with 3.8 million barrels per day of oil in transit, according to the U.S. Energy Information Administration.
Experts state that the crisis poses risks to the region, which is significant for oil production and exports in the world.
“Bab el-Mandab is a key oil supply route,” Dr. Sijbren de Jong, a strategic analyst at The Hague Centre for Strategic Studies.
“If the Houthi rebels succeed in destabilizing this part of the world, of course Saudi Arabia will react strongly, “given the strategic importance of this part of the world for global oil supply, it already sent the price of oil up.”
“It is more likely that this could escalate into a larger proxy war, with Iran backing the Houthi rebels, and Saudi Arabia supporting Yemeni President Abd-Rabbu Mansour Hadi,” he explained.
Iran had voiced its concerns numerous times in the past about plummeting oil prices and blamed Saudi Arabia, which is the most influential OPEC member.
The oil cartel decided against cutting back on production on Nov. 27, 2014 to maintain market share against non-OPEC countries’ rising oil output levels.
Iran President Hassan Rouhani said on Jan. 13 that low oil prices are “a plot,” adding that if Iran suffers from the drop, Saudi Arabia and Kuwait will suffer more.
However, another expert believes that the crisis will not have much effect on the bilateral relations of Iran and Saudi Arabia.
“I do not think it will significantly change relations between the two countries,” Richard Mallinson, a geopolitical analyst at London-based energy market consultancy Energy Aspects, told.
