Global oil prices climbed above $100 a barrel on Thursday for the first time in two months, as an intensifying conflict across the Middle East stoked fears of severe disruptions to worldwide crude supplies. Brent crude rose more than 6% during the session, jumping from around $95 the previous day, according to reporting from the BBC and The Guardian.
The sharp rally, which marked a fifth consecutive day of gains, was driven by mounting concerns that Yemen’s Houthi militia could choke off Saudi oil exports through the Red Sea while tensions between the United States and Iran over the strait of Hormuz continue to escalate, Al Jazeera reported.
The Iran-backed Houthis, who had previously declared a “maritime embargo” against Saudi Arabia, claimed to have struck Saudi Arabian oil tankers in the Red Sea, according to the BBC. The group also said it had hit another vessel in the same waters.
The Red Sea and the adjoining Bab al-Mandab strait represent one of the world’s most critical maritime chokepoints for energy shipments. Analysts cited by The Guardian indicated that a sustained blockade threat in the region, combined with fears over oil flows through the strait of Hormuz, pushed the benchmark price back above the $100 threshold.
The developments coincided with a fresh wave of US military action, as Washington launched additional strikes against Iran, according to the BBC. The intensification of US-Iran fighting has amplified investor anxiety over the security of oil transiting the Gulf region.
Equity markets reacted negatively to the surge, with shares sliding as the higher energy costs and the prospect of prolonged instability weighed on investor sentiment, The Guardian reported. The last time Brent crude traded above $100 was in May.
The strait of Hormuz and the Bab al-Mandab remain focal points for markets, as any prolonged interruption to shipping through either passage has the potential to compound existing supply pressures. Traders and analysts will be closely watching further developments in the conflict and any response from major oil-producing nations in the days ahead.