Oil Prices Surge Past $100 a Barrel as Red Sea Attacks Heighten Tensions

Brent crude, the international benchmark, climbed to $100.64 a barrel on Thursday, up $6.57 (7%) according to FactSet data, while U.S. West Texas Intermediate reached $91.83 a barrel, a 5.8% increase. The rise coincided with Houthi rebels in Yemen claiming attacks on two Saudi oil tankers in the Red Sea, threatening the Bab el-Mandeb Strait, which handles about 7% of global oil shipments, according to Oxford Economics.

U.S. gasoline prices also rose, with the national average hitting $4.09 per gallon, up from $3.94 a week earlier, based on AAA data. The higher energy costs contributed to a 1% drop in both the S&P 500 and the Dow Jones Industrial Average after the opening bell, while the Nasdaq Composite fell 1.8%.

The price surge adds uncertainty to the Federal Reserve’s upcoming policy decision on July 29. Analysts note that higher oil prices could push inflation upward, potentially influencing the Fed to keep rates steady or consider a hike. > "Rate cuts investors were counting on for later this year look a lot less certain today than they did even a week ago, and then they were on shaky ground," said Nigel Green, CEO of deVere Group, in an email.

CME FedWatch data shows the probability of a rate increase rising to 36% from about 11% a week earlier. Treasury yields also climbed, with the 10-year note reaching 4.71%. The last time global oil prices settled above $100 per barrel was on May 22, FactSet data indicates.