Oil prices surpassed $100 per barrel on Thursday for the first time since May, following attacks by Yemen’s Houthi militia on two Saudi oil tankers in the Red Sea. Brent crude futures rose by $6.62, or 7%, closing at $100.69, marking a nearly 40% increase since the start of the conflict in Iran in February. Meanwhile, US West Texas Intermediate crude increased by $5.36, or 6.2%, to settle at $92.19. The escalation of military actions in the region has raised concerns about global oil supply, especially as key shipping routes like the Strait of Hormuz and Bab el-Mandeb face restrictions. Analysts are now predicting that Brent crude could exceed $120 per barrel in the fourth quarter if disruptions continue.
Why It Matters
The new attacks by the Houthis highlight the ongoing geopolitical tensions in the region, which have direct implications for global oil supply. The Strait of Hormuz and Bab el-Mandeb are critical chokepoints, accounting for approximately a quarter of the world’s oil transport. The escalation of military actions has resulted in a significant decline in oil shipments, with Iranian exports dropping dramatically due to heightened risks and US interventions. As a result, OPEC+ nations are considering increasing oil production to stabilize supply, reflecting the interconnected nature of global energy markets and the impact of regional conflicts on oil prices.
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