Texas Oil Nears $85 Amid New Trump Threats to Houthis

Texas Intermediate (WTI) crude oil prices edged closer to $85 a barrel on Tuesday, climbing 2.02% to settle at $84.91. The rise was fueled by U.S. President Donald Trump's threats to intervene if Houthi rebels in Yemen, allied with Iran, disrupt shipping in the Red Sea.

Contracts for August delivery of WTI, the U.S. benchmark, gained $1.68 from the previous closing price. The escalating tensions in the Middle East continue to put pressure on the oil market. The situation intensified after an incident involving a Saudi Arabian aircraft at Sana'a airport, leading the Houthis to announce an immediate blockade against Saudi vessels in the Red Sea.

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The market of oil continues to show tension.

The Bab al-Mandeb Strait, a crucial gateway to the Red Sea, has become a vital alternative route to the Strait of Hormuz, which Iran has previously threatened to block. Any U.S. action against the blockade, especially given Trump's past military actions against Houthi targets, could further escalate the conflict in the Middle East and impact crude oil prices.

Adding to the concerns, the International Energy Agency (IEA) voiced its apprehension regarding energy supply security amid the heightened tensions. While acknowledging "several dampening factors," IEA Executive Director Fatih Birol highlighted that threats to the Bab al-Mandeb Strait are particularly worrying due to its increased importance as an alternative to the Strait of Hormuz.

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The IEA expressed 'concern about the security of supply' after new tensions in the Middle East.