Oil Prices Surge as Red Sea Tanker Attack and U.S. Threats Heighten Tensions with Iran
Brent and U.S. crude futures rose sharply after reports of a tanker hit near Saudi Arabia and President Trump's warning of bombing Iranian infrastructure in response to attacks in the Strait of Hormuz.
Oil prices climbed on Thursday following reports of a tanker strike off Saudi Arabia and renewed U.S. threats to target Iranian infrastructure. At 5:30 a.m. ET, Brent crude for July delivery rose 4.6% to $98.44 a barrel, its highest since late May, while U.S. West Texas Intermediate gained about 3.8% to $90.14, a level not seen since June 8. The gains put Brent on track for a 35.3% monthly increase, the third-largest in a decade, and WTI on course for a roughly 30% rise, also among the top three monthly jumps in ten years.
The United Kingdom Maritime Trade Operations reported on X that a tanker was hit about 70 nautical miles southwest of Al Shuqaiq, sparking a fire that the crew was fighting; no casualties were reported. Yemen’s Houthi group claimed responsibility, saying it targeted two Saudi oil tankers with drones and missiles for violating its maritime blockade. The attacks could be the first confirmed incidents since the Iran-backed group announced a naval blockade against Saudi Arabia, though independent verification was not available.
Hours later, President Donald Trump warned that the United States would bomb an Iranian bridge or power plant each time Tehran attacks a ship in the Strait of Hormuz. > "From this point forward, any time the Islamic Republic of Iran shoots at a ship in the Strait of Hormuz, whether it be by missile, rocket, drone, or any other device or weapon, the United States will bomb and destroy ONE BRIDGE OR POWER PLANT," Trump said.
An unnamed Iranian military source told state-run Tasnim News Agency that Iran would retaliate against U.S.-linked infrastructure and energy assets in the region if such strikes were carried out.
Former U.S. ambassador to Saudi Arabia Joseph Westphal told CNBC that the situation lacks a clear strategy and that Congress is hesitant to approve additional war funding without a defined plan. He warned that rising gas and commodity prices could provoke public backlash in the United States.
Secretary of State Marco Rubio said Iran was not being serious about reaching an agreement with Washington but affirmed U.S. commitment to diplomacy in the Middle East. HSBC noted that the recent oil rally reflects renewed concerns over the Strait of Hormuz after the ceasefire breakdown, and its outlook depends on whether diplomatic efforts can restore predictable shipping flows.