OIL FUTURES: Crude rallies at open as US, UK launch strikes against Houthis

US crude oil futures rallied soon after market opened Jan. 12, amid concerns that the US and UK strikes on Houthi targets in Yemen could portend a wider Middle East conflict.

At 0115 GMT, NYMEX February WTI was up $1.49 at $73.51/b and ICE March Brent traded $1.52 higher at $78.93/b.

The US together with the UK and allied forces launched strikes against Houthi targets across several sites in Yemen, according to a statement from US President Joe Biden released by the White House said late Jan. 11.

"These targeted strikes are a clear message that the United States and our partners will not tolerate attacks on our personnel or allow hostile actors to imperil freedom of navigation in one of the world's most critical commercial routes," Biden said in the statement. "I will not hesitate to direct further measures to protect our people and the free flow of international commerce as necessary."

Iranian-backed Houthi rebels launched multiple attacks on commercial shipping in the Red Sea in recent weeks, including a major attack with anti-ship missiles and drones from the Houthi-controlled areas of Yemen on Jan. 9, the US Central Command said.

The UK's Defense Secretary Grant Shapps said the Jan. 9 attack was the biggest Houthi attack in the Red Sea to date, and the US said it was the 26th Houthi attack on commercial shipping since Nov. 19.

The White House on Jan. 3 issued a joint statement from the governments of the United States, Australia, Bahrain, Belgium, Canada, Denmark, Germany, Italy, Japan, Netherlands, New Zealand, Republic of Korea, Singapore, and the United Kingdom calling for an immediate cessation to Houthi attacks against commercial vessels.

NYMEX February RBOB traded 4.28 cents higher at $2.1571/gal and February ULSD climbed 4.46 cents to $2.7184/gal.

Iran's navy seized an oil tanker taking Iraqi crude to Turkey on Jan. 11, in a new retaliatory move over US sanctions enforcement last year, which is expected to further escalate tensions with Tehran amid growing threats to shipping in key Middle East chokepoints.

The Marshall Islands-flagged St. Nikolas tanker, previously named the Suez Rajan, was seized off the coast of Oman early Jan. 11 carrying a 145,000-mt cargo of Iraq's Basrah crude en route to Aliaga in Turkey via the Suez Canal, according to the Greek tanker owner Empire Navigation.