Oil Prices Surge as Red Sea Tanker Attacks Heighten Middle East Tensions

Brent crude approached $100 a barrel on Thursday following claims by Yemen’s Iran-backed Houthi movement that it had hit two Saudi-flagged tankers in the Red Sea. Saudi officials confirmed an attack on the vessel Encelia and said its crew were safe, while they did not comment on the second claimed strike.

U.S. Central Command reported a series of overnight strikes on Iranian drone and missile storage sites and air-defence installations, describing the operations as aimed at degrading Iran’s ability to threaten commercial shipping. Iran’s Islamic Revolutionary Guard Corps responded by saying it had attacked U.S. military targets in Jordan and Kuwait.

The escalation adds pressure to an already strained oil market. Brent prices are now about 40 % higher than before the conflict began in February, and U.S. West Texas Intermediate futures have risen similarly. Analysts at RBC Capital Markets warned that the conflict has entered a more dangerous phase and that a full-scale regional war could push prices toward $150 a barrel.

The Houthi attacks, if they succeed in limiting Red Sea traffic, could cut roughly 4 % of global oil supply, according to the group’s statements. The International Energy Agency’s executive director, Fatih Birol, said a resolution that fully reopens the Strait of Hormuz is essential to prevent further deterioration in global energy security.

U.S. Secretary of State Marco Rubio urged the Houthis to de-escalate, suggesting they had been drawn into the conflict by Iran. The United States has indicated it will continue military actions until Iran’s negotiators engage seriously in diplomatic talks.