Oil Prices Surge as Saudi Launches Air Strikes in Yemen

Prices of crude oil climbed up after Saudi Arabia let loose air strikes against Iran and its allies in Yemen. Oil prices surged particularly in Asia as air forces of the Saudi Arabian coalition made up of 10 countries started bombing selected targets.

Brent crude practically touched 60 while WTI broke resistance to almost 50.00 and for a short time touched 52.00. However, the two benchmarks recovered later during Asian trading.

At the start, markets were apprehensive regarding possible supply interruptions along with likelihood that hostilities will spread to the rest of the Middle East.

Yet some of these worries eased after Asian importers said supply disruptions did not bother them at all.

These offered support to the usual safe bets in the FOREX markets like the yen and Swiss franc.

Meanwhile, the dollar dropped to 118.33 yen which is the weakest since February 20 before rallying to 118.73. It also reached a low versus the franc (0.9491 francs).

The bombing of Yemen is expected to heighten the conflict with Iran even if Yemen is not a principal producer of crude oil. At any rate, the global market was shaken because Saudi Arabia is the biggest oil exporter in the whole world.

Analysts are also concerned with the approach of the euro zone in handling this situation since Saudi Arabia exports oil to Europe through the shoreline of Yemen. Hence, the continent’s importers will most likely be affected than Asian traders.