Cutting off Red Sea oil route may be one crisis too many

Crude oil futures rose on Monday. The Red Sea conflict has forced tankers to take the long way around Africa, adding weeks to voyages. Asian refining output has taken a hit. Crude arrivals slowed, compressing processing margins, traders said. China's post-Covid recovery faces a new challenge from higher fuel costs.

Rising fuel prices are starting to curb demand. Analysts described the situation as a dangerous new phase for the oil market. The longer tankers stay on the longer route, the tighter the market gets, one trader said.

The next test for the market comes with weekly U.S. inventory data on Wednesday.