On Thursday, the Iran‑backed Houthi movement in Yemen announced it had attacked two Saudi oil tankers — ENCELA and LAYLIA — while they were sailing through the Red Sea, asserting that the ships had breached the naval blockade the group declared on Monday, according to the Guardian.
“We struck the Saudi oil tankers ENCELA and LAYLIA because they violated the blockade order issued by our armed forces,” said Houthi military spokesman Yahya Saree.
The UK Maritime Trade Operations (UKMTO) said it had received reports of a tanker being hit by an unidentified projectile and catching fire in the Red Sea, about 70 nautical miles off Saudi Arabia’s Al Shuqaiq.
Market Reaction
At the time of writing, West Texas Intermediate (WTI) crude was trading 3.35% higher at $87.05 per barrel.
WTI Oil FAQs
West Texas Intermediate (WTI) is a grade of crude oil traded on global markets. As one of the three primary benchmarks—alongside Brent and Dubai Crude—WTI is known as “light” and “sweet” due to its low density and sulfur content. It is a high‑quality oil that refines easily, produced mainly in the United States and shipped through the Cushing hub, often called the “Pipeline Crossroads of the World.” WTI serves as a key reference point for oil pricing and is frequently cited in news reports.
Like any commodity, WTI prices are chiefly driven by supply and demand. Strong global economic growth tends to lift demand, while a slowdown reduces it. Geopolitical tensions, conflicts, and sanctions can interrupt supply and sway prices. OPEC’s production decisions also play a major role, as the cartel sets output levels for its member nations. Because oil is priced in U.S. dollars, the dollar’s value affects WTI: a weaker dollar makes oil cheaper for holders of other currencies, and a stronger dollar has the opposite effect.
Weekly inventory reports from the American Petroleum Institute (API) and the U.S. Energy Information Administration (EIA) influence WTI prices. A drawdown in stocks usually signals stronger demand, pushing prices up, whereas a build‑up suggests ample supply, which can drag prices lower. API releases its figures each Tuesday, with EIA following on Wednesday; the two reports typically agree within 1% about three‑quarters of the time. Analysts often regard the EIA data as more authoritative because it comes from a government agency.
The Organization of the Petroleum Exporting Countries (OPEC) comprises twelve oil‑producing states that meet twice a year to set collective output quotas for its members. These decisions frequently sway WTI prices: cutting quotas tightens supply and tends to raise prices, while raising output loosens supply and can depress prices. OPEC+ extends this framework by adding ten non‑OPEC partners, most notably Russia.