Oil prices rise on Middle East tensions

Both global oil benchmarks increased on Tuesday, with a weaker US dollar and tension in the Middle East fuelling concerns about global supply disruptions.

The international benchmark crude Brent traded at $80.16 per barrel in morning trade in London, a 0.12% rise from the closing price of $80.06 a barrel in the previous trading session on Monday.

The US benchmark, West Texas Intermediate (WTI), traded at the same time at $74.85 per barrel, up 0.12% from Monday's close of $74.76 per barrel.

The decline in the US dollar against other currencies aided the rise in oil prices by making oil cheaper for buyers trading in foreign currencies. The US dollar index, which measures the US dollar's value against other currencies, decreased by 0.28% to 102.834 on Tuesday morning compared to Monday's closing price.

The conflict in the oil-rich Middle East is putting supplies at risk and pushing prices higher.

The UK'S Ministry of Defense stated in a joint statement on Monday that US and British forces had struck a number of Houthi targets in Yemen as they continue to threaten commercial ships in the Red Sea.

The US and the UK announced that they hit eight Houthi targets in Yemen as part of air operations they carried out with the support of Australia, Bahrain, Canada and the Netherlands.

In a warning to the Houthi leadership, the countries said in a statement that 'we will not hesitate to defend lives and the free flow of commerce in one of the world's most critical waterways in the face of continued threats.'

Since mid-november, the Houthis have carried out over 30 attacks on commercial ships in the Red Sea. The Houthis said their attacks aim to pressure Israel to halt its deadly onslaught on the Gaza Strip, which has killed more than 25,295 people since October 7.

Meanwhile, a supply drop in the US, the world's largest oil consumer, aided price increases on Tuesday.

Due to the cold weather in the US, there are concerns that refinery operations will be affected, resulting in a fall in oil production.