"Red Sea Tensions Disrupt European Oil Supply, Prompting Market Contingency Plans"

Oil supply to Europe from the Middle East has nearly halved due to ongoing attacks by Yemen’s Houthi rebels, leading to tighter supply and increased competition for crude. Disruptions in the Red Sea, combined with rising Chinese demand, have impacted European markets, with the market structure of Brent crude reflecting tighter supply. The disruptions have forced vessels to sail around the Cape of Good Hope, raising freight rates. Additionally, other factors such as a drop in Libyan supply and higher demand for Angolan crude from China and India have further tightened the European crude market.