Crude oil prices surged toward $100 a barrel Thursday after Iran-backed Houthi militants claimed missile and drone strikes on two Saudi Arabian tankers in the Red Sea.
Brent crude climbed 4.21% to $98.03 per barrel in early European trading, marking the commodity’s fifth consecutive day of gains and its highest level in nearly two months.
U.S. West Texas Intermediate futures rose 2.7% to $89.14, while international benchmark Brent crude futures for September delivery were last seen up 3.6% at $97.46 per barrel.
The Houthis identified the targeted vessels as the Encelia and the Layla, saying they fired on both ships for violating a naval blockade the group had declared against Saudi Arabia.
Minutes before the Houthi statement, UK Maritime Trade Operations reported that a ship had been struck by a projectile southwest of Al Shuqaiq on Saudi Arabia’s Red Sea coast, causing a fire on board.
Following the attack, products tanker Encelia began broadcasting a “not under command” status, indicating it may have lost maneuverability due to damage, according to ship-tracking data compiled by Bloomberg.
The Institute for the Study of War, a Washington-based think tank, said at least seven vessels had changed course to avoid transiting the Bab el-Mandeb Strait in light of the Houthi blockade.
The Bab el-Mandeb Strait is a critical choke point connecting the Red Sea to the Gulf of Aden, and serves as a vital conduit for Saudi oil reaching global markets.
Riyadh had previously re-routed millions of barrels of oil exports from the Strait of Hormuz through the Red Sea, exiting via Bab el-Mandeb, a lifeline that now looks increasingly fragile.
Priyanka Sachdeva, senior market analyst at Phillip Nova Pte, said the durability of the price rally would depend on whether the Red Sea attack proves isolated or triggers prolonged supply-chain disruptions.
Sachdeva added that “bulls can comfortably aim for $100 a barrel” for Brent crude, reflecting the heightened risk premium now being baked into oil markets.
Brent has jumped 33% in July as the 60-day ceasefire between the U.S. and Iran has unravelled amid renewed hostilities between the two nations.
President Donald Trump threatened to bomb bridges and power plants, and reiterated threats to strike Pickaxe Mountain, a suspected Iranian nuclear site, further rattling energy markets.
Iran responded by warning it would retaliate against U.S.-linked infrastructure across the region, with an unnamed Iranian military source telling state-run Tasnim News Agency: “If the Americans target a bridge or a power plant in Iran, Iran will, in turn, strike infrastructure and bridges in the region, including energy facilities where the United States has interests.”
The U.S. Central Command said American forces had completed a 12th successive round of strikes against Iran, deepening the conflict with no clear resolution in sight.
Deutsche Bank analysts said in a note Thursday that fears of a widening Middle East conflict have “fuelled speculation” that major central banks could hike interest rates to tame a potential uptick in inflation.
