Oil Prices Surge Above $100 as Red Sea Tanker Attacks Heighten Supply Concerns

Brent crude rose more than 7.5% to over $101 a barrel in mid-morning trading on Thursday, its highest level in eight weeks, while U.S. West Texas Intermediate climbed over 6.5% to near $93, the strongest price since mid-June. The jump follows claims by Iran-backed Houthi rebels that they struck two Saudi oil tankers in the Red Sea after announcing a naval blockade of the kingdom. The incidents mark the first expansion of ship attacks beyond the Strait of Hormuz since the conflict began, raising concerns about the Bab el-Mandeb strait, through which 12%-15% of global maritime trade passes.

"Inflation has remained top of the agenda for markets this morning," said Jim Reid, global head of macro research at Deutsche Bank, noting that the Houthi attacks heightened fears of a widening conflict.

U.S. gasoline prices rose to a national average of $4.09 per gallon, according to AAA data, erasing recent gains after a June memorandum of understanding between the United States and Iran collapsed. The United Kingdom’s Maritime Trade Office reported a tanker hit by an unknown projectile north of Bab el-Mandeb, and Saudi state media said the vessel Encelia was set ablaze in the Red Sea.

Higher energy costs contributed to a rise in U.S. 10-year Treasury yields to 4.7%, the highest since January 2025, and pushed the average 30-year mortgage rate to 6.77%, a July 2025 peak. Stock indexes fell, with the S&P 500 down more than 1.3% and the Nasdaq slipping 2.5% after mixed earnings from major tech companies.