Oil tops $100 again after Houthi attack on Saudi tankers worsens oil supply disruption

NEW YORK:- Oil prices climbed above $100 on Thursday, reaching their highest level in nearly two months, after Yemen’s Houthis said they had attacked two Saudi oil tankers in the Red Sea, adding to concerns over global supply disruptions from a near-halt in trade through the Strait of Hormuz.

Brent futures rose $6.64, or 7%, to $100.71 a barrel at 10:52 a.m. ET (1452 GMT), exceeding $100 for the first time since late May. The global crude oil benchmark has risen nearly 40% this month and was in technically overbought territory for a ninth day in a row, the first time since September 2023.

U.S. West Texas Intermediate crude rose $5.18, or 6%, to $92.01, trading above $90 for the first time since June 11. Both contracts were up for the fifth straight day.

“The (Saudi tankers) attack has sent world crude oil prices higher and into a higher gear as the ramifications of yet another chokepoint for crude oil trade originating from the Middle East is constricting trade,” said Tim Snyder, chief economist at Matador Economics.

Saudi tankers attacked

Yemen’s Houthis have opened a new front in the Iran war by targeting vessels carrying Saudi oil in the Bab el-Mandeb Strait after stating they would impose a naval blockade on shipments from Saudi Arabia. Houthi attacked two Saudi Arabian oil tankers in a military operation, the group said on Thursday, with a Saudi news agency later confirming that one of the two vessels was ablaze after an assault while sailing in the Red Sea.

Goldman Sachs said Brent might exceed $120 a barrel in the fourth quarter and average $100 next year if the Strait of Hormuz remains disrupted through 2027, with further upside if the Bab el-Mandeb Strait and Suez Canal also suffer persistent disruption.

Iran’s Revolutionary Guards said an oil tanker caught fire after an explosion while attempting to follow a mined route in the southern area of the Strait of Hormuz near the coast of Oman and that two others had turned back. The Guards said the strait was under their control and “completely closed” while U.S. actions continued in the region, warning that no tanker would be allowed to enter or leave without coordination with Iran.

Iranian strikes on vessels crossing the Strait of Hormuz have resulted in a drop in non-Iranian oil tankers traversing the waterway. At the same time, the reintroduction of a U.S. naval blockade targeting Iranian ports has likely resulted in Iranian oil loadings falling to zero from 1.5 million to 2 million barrels per day at the start of the month, Giovanni Staunovo, a UBS analyst, said.

As a result of fewer shipments exiting the strait, loading activity within the Gulf has fallen to 2.5 million bpd over the past seven days, compared with 6 million bpd over the past 30 days, he added.

The U.S. military said it had completed a 12th consecutive night of attacks on Iran, hours after U.S. President Donald Trump vowed to destroy an Iranian bridge or power plant every time Iran shoots at a ship in the Strait of Hormuz.