Brent Bounces As Houthis Attack, Sink Vessel Off Yemen With Sea Drone

The Houthis have quickly made good on their earlier threat, with the United Kingdom Maritime Trade Operations (UKMTO) Centre having reported the following fresh attack off Yemen:

• UKMTO has received a time-late report of an incident 9NM southwest of Al Mukha, Yemen.
• The CSO of the vessel has reported that the vessel was attacked by an Uncrewed Surface Vessel which caused a fire onboard. The crew have been rescued by local authorities and are safe and well.
• The vessel has been reported as sunk.
• Vessels are advised to transit with caution and report any suspicious activity to UKMTO while authorities are investigating.

The stricken vessel's crew has reportedly been rescued, after the fire on board and subsequent sinking.

Oil prices remain elevated also as over in the Strait of Hormuz, the Iranians insist that the Omani deal to reopen the strait has "nothing to do with the United States."

earlier

Brent crude bounced off the $78-a-barrel level early Wednesday after Iran-backed Houthi militants threatened to attack Saudi oil tankers in the northern Red Sea, reviving fears that the regional conflict could spread to another critical shipping channel. The move came despite an overnight Axios report, citing two sources and a US official, that President Trump's negotiators and Tehran are nearing an Oman-brokered interim peace deal to reopen the Strait of Hormuz. 

The Bloomberg report cites Houthi military spokesman Yahya Saree, who said the threat is retaliation for Saudi Arabia diverting oil tankers away from the Bab el-Mandeb chokepoint in the southern Red Sea.

Brent crude bounced from the $78 level to $80, clawing back some of its losses after tumbling from $86 to $78 on news that the US and Iran were closing in on an interim deal to reopen Hormuz.

WTI topped $76 this morning before fading modestly...

The latest shipping data from the Hormuz chokepoint show that transits through the critical waterway remain well below the levels seen during the first interim peace deal, which eventually fell apart one month later and resulted in the recent tit-for-tat strikes.

Last night, President Trump told reporters, "They had an all-day negotiation. The Strait of Hormuz is going to be open very soon," adding, "If they back out again, they are going to get hit really hard."

Trump has repeatedly threatened massive strikes if Tehran fails to reach a deal, only to later signal progress in negotiations.