Oil prices rallied and stocks tumbled again Monday as the Middle East crisis escalated with the entry of Houthi rebels into the Iran war and investors grew increasingly concerned the United States would send in ground troops.
As the conflict moved into its fifth week, the spectre of a widening conflict grew as Yemen's Houthi rebels on Saturday said they had fired "a barrage of cruise missiles and drones" at strategic sites in Israel.
The strikes raised concern about the war spreading to the Red Sea, with Saudi Arabia rerouting much of its oil exports there to avoid the Strait of Hormuz, through which 20 percent of crude and gas passes and has been effectively closed by Tehran.
The news sent the price of oil to its highest level since earlier in the month after the United States and Israel began their campaign against Iran. Both main contracts jumped more than three percent at one point, with Brent hitting close to $117 a barrel.
Adding to the dour mood were Donald Trump's remarks to the Financial Times (FT) that he wanted to "take the oil in Iran" and could take the country's Kharg Island "very easily".
Kharg Island, located off the west coast of Iran, is a vital oil terminal for the country and is being eyed by the Pentagon for ground operations, though the United States insisted it would stop short of a full-scale invasion.
"Maybe we take Kharg Island, maybe we don't. We have a lot of options," he told the FT. "It would also mean we had to be there for a while."
Source: TOI
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