Oil Surges Past $100 Following Houthi Attacks on Saudi Tankers in Red Sea
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Oil prices surged on Thursday, with the global benchmark Brent crude surpassing the $100 per barrel mark for the first time since late May. The price spike followed claims by Yemen’s Iran-aligned Houthi militants that they targeted and struck two Saudi oil tankers in the Red Sea.
By mid-morning in New York, September Brent crude futures jumped 6.3% to trade at $100.06 a barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures for September delivery rose 4.8% to reach $90.95 a barrel.
According to the Houthis, the attack on the Saudi vessels was carried out because the ships allegedly violated a recently declared maritime blockade. While Saudi officials have yet to confirm any damage to their tankers, the incident has heightened concerns over potential supply disruptions along critical Middle Eastern shipping corridors. This development follows previous threats by the Houthis to block Saudi-linked vessels from navigating the Bab el-Mandeb Strait, a vital chokepoint linking the Red Sea to the Gulf of Aden.
Ongoing instability in the region has already prompted several India- and China-bound Saudi tankers to alter their routes. Analysts warn that prolonged disruptions could force shipping companies to bypass the Red Sea entirely, rerouting vessels around the southern tip of Africa, which would significantly increase transit times and shipping costs.
The situation drew sharp criticism from U.S. President Donald Trump, who warned of severe consequences. In a social media post, Trump noted that while the Houthis had previously halted attacks on commercial shipping following U.S. military action a year ago, their latest actions would not go unanswered. He stated that the U.S. would hold Iran directly accountable for the actions of its proxy, warning of major military retaliation against both Tehran and the Houthi rebels if the attacks persist.
Tensions in the region remain elevated as the U.S. military conducted its 12th consecutive night of airstrikes against Iranian targets. In response, Iran’s Islamic Revolutionary Guards Corps (IRGC) reported an explosion along a mined shipping route south of the Strait of Hormuz, claiming one tanker caught fire while two others were forced to turn back. Additionally, the IRGC claimed responsibility for targeting U.S. military installations in Kuwait and declared that the Strait of Hormuz was “fully closed” to unauthorized tanker traffic.
Because the Strait of Hormuz and the Bab el-Mandeb Strait are critical conduits for global oil transit, energy markets remain highly sensitive to these escalating geopolitical risks, rising maritime insurance premiums, and the threat of further attacks.
Market analysts at Vital Knowledge noted that the geopolitical landscape is worsening as a secondary conflict front opens in the Middle East, leaving U.S. foreign policy in a challenging position between avoiding escalation and managing the deteriorating status quo.
The price rally occurred despite domestic data showing an unexpected rise in U.S. oil supplies. According to the Energy Information Administration (EIA), U.S. commercial crude inventories increased by 2 million barrels to 411.7 million barrels for the week ending July 17, defying analyst forecasts of a stock draw. Additionally, gasoline stocks grew by 0.8 million barrels, distillate inventories rose by 1.4 million barrels, and total commercial petroleum products increased by 11.6 million barrels.
