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The Street
The Street
Martin Baccardax

Oil prices jump as BP pauses Suez traffic amid attacks by Iran-backed rebels

Global oil prices jumped Monday after BP (BP) -) suspended crude shipments through the Suez canal following a surge in attacks on cargo ships by militants tied to Iran.

The Yemen-based Houthi group, which is backed by Tehran, has launched a series of drone and missile strikes on ships with western ties passing through the Suez. The group has called the attacks a response to Israel's war with Hamas in nearby Gaza. 

Norwegian-registered M/V Swan Atlantic was attacked by Houthi rebels Monday, U.S. officials reportedly confirmed to Reuters. And U.S. National Security Adviser Jake Sullivan said last week that Washington was in talks with a host of other countries to "ensure safe passage of ships in the Red Sea."

Maersk also paused Red Sea traffic

Denmark's A.P. Moller-Maersk, (AMKBY) -) the world's biggest container-ship group, said late last week that it would pause traffic through the Red Sea after one of its vessels, the Maersk Gibraltar, was targeted by missiles while it was travelling to Saudi Arabia. 

BP also said Monday it would pause shipments through the canal. citing "the deteriorating security situation for shipping in the Red Sea," which separates Egypt from Saudi Arabia and leads into the narrow Suez passage. 

The Suez canal, one of the busiest passages in the world, carries around 15% of global shipping traffic and provides an alternative route for goods traveling from Asia to Europe and the Americas. 

Brent crude futures contracts for February delivery, the global pricing benchmark, jumped $2.30 in early Monday trading to change hands at $78.86 per barrel following news of BP's pause. The move suggests energy shipments could face increased attacks in the coming weeks.

WTI futures for January delivery, which are tightly linked to U.S. gasoline prices, were marked $2.21 higher at $73.64 per barrel. 

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