Global equities are facing selling pressure on Thursday and Brent oil futures spiked over 4 percent following news yesterday that Saudi Arabia and its Gulf allies launched air strikes against Iranian backed Houthi Shiite military rebels in Yemen after they drove Yemen’s President Hadi away from its capital city.
Although the military strikes haven’t disrupted oil production in the region, they highlight growing geo-political tension between Saudi Arabia and Iran across the region.
May crude Brent rose over $2.00 on Thursday to $59 a barrel, marking the biggest 5 day gain since 2011, due to growing concerns about the passage of oil tankers on the Bab el- Mandeb Strait located on the coastal waters of Yemen.
The region has a large western navy presence with U.S. and French bases in neighboring Djibouti.
Yesterday US equities sold off and the U.S. dollar was under pressure on growth concerns after U.S. durable goods orders sharply missed estimates.