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Oil price up with ongoing Middle East tension

Both crude benchmarks continued to rally on Monday, with rising tension in the Middle East after the US and the UK carried out strikes on multiple Houthi targets in Yemen last week.

The international benchmark crude Brent traded at $78.51 per barrel at 11 a.m. local time (0800 GMT), a 0.28% increase from the closing price of $78.29 a barrel in the previous trading session on Friday.

The American benchmark, West Texas Intermediate (WTI), traded at the same time at $72.94 per barrel, up 0.21% from Friday's close of $72.79 per barrel.

Tension surged in the Middle East, the region that hosts the majority of global oil resources, after US and British warplanes carried out airstrikes in the Yemeni cities of Sanaa, Hudaydah and Taiz in response to the Houthis' ongoing attacks on international shipping lanes in the Red Sea.

Expressing his views on the attacks, US President Joe Biden stated that they would not hesitate to take further measures, if necessary, to protect the US people and the free flow of international trade.

The US military said that the Houthis have carried out 27 attacks in the Red Sea since Nov. 19, 2023.

British Foreign Secretary David Cameron defended the action to strike Yemen, commenting that the UK is "prepared to back our words with actions" against the Houthis.

In response, the Iranian-backed Houthis in Yemen said they would continue their military operations against Israel and prevent Israeli ships from passing through the Red Sea, where the world's largest oil trade occurs.

The decision by numerous shipping companies to cease operations has led to the suspension of energy supplies via the Red Sea route and an increase in the anticipation of a global supply chain crisis, both of which are driving up oil prices.

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