Oil advanced as more oil companies and tanker owners began to avoid the Red Sea amid the ramp up in attacks in the region.

Global benchmark Brent rose as much as 2.8 per cent to trade above US$78. BP Plc said it will pause all shipments through the Red Sea, while Equinor ASA is diverting vessels away from the region. Euronav NV, a major shipowner is also keeping its ships clear for the time being, citing safety grounds.

The raft of firms taking action Monday followed similar moves by container liners last weekend. A company that provides thousands of crew members and ship management to vessels was also asking shipowners to consider alternative routes.

“It has been escalating beyond what we have seen at any point in time really,” Lars Barstad, chief executive officer of the management arm of Frontline Plc, one of the world’s largest tanker owners, said in a Bloomberg TV interview. “We are afraid that it is only a question of time until we see a ship that is completely unrelated to Israel or any part of the conflict that will be attacked.”

Despite the geopolitical risks, crude has still dropped more than 20 per cent from its late-September high and is down 10 per cent for the year amid surging U.S. shale supply and skepticism over promised OPEC+ output cuts. A shifting outlook for Fed rate policy has also seen prices swing in recent days, with officials recently pivoting away from bets of aggressive cuts next year.

Hedge funds are now the least bullish they’ve been in data going back to 2011, though some Wall Street analysts do see scope for prices to rebound next year.

Prices:

• Brent for February settlement rose three per cent to $78.63 a barrel at 9:10 a.m. in New York
• West Texas Intermediate for January delivery, which expires Tuesday, added 3 per cent to $73.33 a barrel
• The more active February contract was up three per cent at $73.67.