Macquarie: The Red Sea conflict is unlikely to lead to a reduction in oil supplies

According to a report released by analysts led by Vikas Dwivedi of Macquarie Group, tensions in the Middle East are unlikely to lead to a reduction in crude oil supply, as most of the parties involved seem to respond in a way that aims to avoid a serious escalation. The risk is not zero, but the most likely scenario for the next 1-2 months is that as the conflict in Gaza continues and the Houthis and Saudi Arabia continue to negotiate a civil war in Yemen, there will still be incidents and small escalations. The Red Sea attacks are the biggest source of logistical and overall supply risk for the market.