(Newsworthy.news) – Amid the ongoing unrest in the Middle East and growing concern for supply issues, the price of oil has already risen almost 2 percent since 2024 began.
Specifically, the price of oil giant Brent Crude’s product has increased 1.7 percent and the United States West Texas Intermediate crude rose 1.5 percent. Experts in economics and the oil industry have predicted that the average price of Brent Crude in 2024 will be $82.56 per barrel compared to the $82.17 per barrel average in 2023.
The primary threat to adequate oil supply lies in the ongoing tensions in the Middle East, where Iran-supported forces maintain efforts to stir up trouble in the Red Sea. Since the beginning of the war between Israel and Hamas—sparked by a surprise attack from the terrorist group and subsequent counteroffensives that have killed thousands of civilians on both sides—shipping vessels in the area have been threatened, which could lead to larger scale, regional conflict if international trade continues to be impacted.
Most recently, helicopters from the United States military shot down multiple vessels operated by Houthi militants, who are also supported by Iran.
Considering the tension, shipping companies are leaning towards changing course and traveling around the African tip instead of through the Red Sea. This method, however, results in higher expenses and adds nearly a month to delivery times.
Hapag-Lloyd, a shipping company based in Germany, recently announced its plans to continue redirecting its ships along the route of the Cape of Good Hope and away from the Suez Canal. The company said it would maintain this policy up until January 9 at least, citing security concerns.
A total of 166 ships had been redirected by the end of 2023, with an additional 28 on track to travel the Suez Canal paused en route. The percentage of vessels passing through the canal have dropped more than 50 percent since the Red Sea attacks.
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