Crude oil prices are surging in trading early Thursday, after news broke that the Saudi Arabian air force is bombing Houthi rebels in the country.
Saudi Arabia says it will do “anything necessary” to defeat the rebels, but the group took over an airport on Wednesday, and the President reportedly fled the country by boat.
The Houthi militias are primarily Shia and backed by Iran, which is not good news as far as the Sunni monarchy in Saudi Arabia is concerned.
All of this is sending crude oil prices surging.
After several days of relative stability Brent oil prices are up, rising 3.67% to $US58.38 as of 7:20 a.m. GMT (2:20 ET). WTI prices are similarly up 3.81% at $US51.09.
Here’s how that looks:
Yemen is a minnow in terms of global oil production, and is not important to the supply on its own. But it has both a border with Saudi Arabia (the world’s biggest oil exporter) and the Yemeni city of Aden lies on the Gulf of Aden, a narrow shipping route through which much of the world’s oil travels — leaving the gulf and destined for Europe and the Americas.