The Red Sea is a critical waterway connecting Asia, Africa, and the Middle East.
This means any crisis in the region could significantly impact global oil prices.
Bad news for some, but if you know what you’re doing…
You can pocket substantial oil profits on either side of the price action.
Just take a look at this map of the Red Sea.
Notice the Suez Canal and Bab el-Mandeb?
Those are the two key shipping routes at either end of the Red Sea.
According to Goldman Sachs, seven million barrels of oil flow through the Bab el-Mandeb Strait daily. Then, 4.1 billion cubic feet of daily liquefied natural gas (LNG) shipments flow through the Suez Canal from the United States to Asia.
I bring this up to show you the significance of these routes.
And why the continuous barrage of attacks by Iran-backed Houthi rebels on ships passing through the Bab-el-Mandeb strait has lifted oil prices… With Brent crude (the global oil benchmark) rising 8% since mid-December to $79+ per barrel.
But that’s just a small glimpse of what could happen if this crisis escalates.
Citing safety concerns, the world’s largest shipping companies, MSC, CMA CGM, and Moller-Maersk, say they would avoid the Red Sea’s Suez Canal as several container ships have been attacked by Houthi militants from Yemen.
The potential for increased shipping disruptions persists as
the involvement of countries like Saudi Arabia, Iran, Egypt, and Turkey in regional affairs adds complexity and raises concerns about escalating tensions.
Efforts are underway to address the Red Sea crisis.
But it’s anyone’s guess how soon things return to normal.
Either way, as outside forces cause price fluctuations, you and I can exploit lucrative opportunities hidden in plain sight, especially in this market where one good trade can net you 12 months’ worth of profits in just two weeks.
See our approach to big oil profits as this crisis unfolds.
Wishing you a blessed day,