The oil price firmed on Thursday after spiking by as much as six dollars a barrel in morning trading following the reports of airstrikes in Yemen.
By the day’s end that rise had been halved, but the sudden jump revealed the sensitivity of the market despite its gross current oversupply.
Yemen produces little oil itself, but it controls the waters through which much of Europe’s trade and oil passes on its way to the Suez canal, so unrest there might threaten a vital shipping lane. Four million barrels of oil pass through here every day.
The Bab el-Mandeb straits near Yemen are just 40 kilometres wide, and after Saudi Arabia and the Gulf states decided to bomb Houthi rebels in the Yemen capital in support of the ousted president, Iran intervened.
It condemned the airstrikes as an “agression” and said Iran would “make everything possible to control the crisis” in Yemen.
However Yemen is a sideshow to the main oil-sensitive events in the Middle East, so the jump in prices over the past 24 hours says more about the plays by major investors in the oil markets than any risk to global oil supplies.