Oil prices surged after the US and UK conducted airstrikes on Houthi rebel targets in Yemen in response to the group's attacks on ships in the Red Sea. West Texas Intermediate oil rose by up to 1.9% to trade above $73 per barrel. These airstrikes marked an escalation in the conflict with the Iranian-backed Houthi rebels. Earlier in the week, the Houthis had launched a significant assault on shipping in the region, despite the presence of a US-led naval force. The tensions in the Middle East have been on the rise since the Israel-Hamas war in October, with the Houthis continuing to target ships. Additionally, Iran's seizure of an oil tanker off the coast of Oman further added to the turmoil in the region. The oil market has experienced volatility this year due to various factors, including Middle East tensions, concerns about rising non-OPEC+ oil supply, Saudi Arabia's pricing cuts, and growing US stockpiles.
At noon, the S&P/ASX 200 is 0.04 per cent lower at 7,503.20.
The SPI futures are pointing to a fall of 17 points.
Best and worst performers
The best-performing sector is Energy, up 0.63 per cent. The worst-performing sector is Utilities, down 1.53 per cent.
The best-performing large cap is IGO (ASX:IGO), trading 1.13 per cent higher at $8.04. It is followed by shares in Santos (ASX:STO) and Northern Star Resources (ASX:NST).
The worst-performing large cap is AGL Energy (ASX:AGL), trading 2.86 per cent lower at $8.99. It is followed by shares in Meridian Energy (ASX:MEZ) and IDP Education (ASX:IEL).
Commodities and the dollar
Gold is trading at US$1782.70 an ounce.
One Australian dollar is buying 66.95 US cents.
