What is the direct link between Middle East conflict and rising oil prices?

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Middle East Conflict Directly Fuels Oil Price Increases

The re-escalation of hostilities in the Middle East has directly led to a surge in oil prices, with Brent crude soaring seven per cent back above US$100. This increase is a consequence of fresh tit-for-tat attacks between Iran and the United States, and the involvement of Yemen's Houthi rebels in the conflict.
Houthi Rebel Actions in the Red Sea

Yemen's Houthi rebels have actively joined the conflict with Tehran, striking Saudi Arabia's shipping in the Red Sea and declaring a blockade of Saudi ports. This action directly impacts oil transportation routes, as Saudi Arabia had been utilising the Red Sea to export millions of barrels of oil that would otherwise flow through the Strait of Hormuz.
Iran-US Escalation and Supply Concerns

The tit-for-tat attacks between Iran and the United States, coupled with the Houthi actions, have prompted vows from both nations to step up attacks on one another. Such an escalation in a region crucial for global oil production raises significant concerns about potential supply disruptions.
Potential for Further Market Impact

The closure of the Red Sea shipping channel, a vital artery for Saudi oil exports, would remove substantial volumes of oil from the market. This reduction in available supply, in the context of ongoing geopolitical tensions, is a primary driver for the observed spike in crude oil prices.

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What is the direct link between Middle East conflict and rising oil prices?

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