Brent crude climbed above $100 a barrel for the first time since May after Houthi fighters struck two Saudi oil tankers and President Trump threatened Iran with military retaliation. The attacks pushed shipping away from a second Middle East chokepoint before prices eased back below $100 as equity markets steadied.
Brent crude rose more than 6%, piercing $100 a barrel for the first time since May. The surge followed Houthi strikes on two Saudi oil tankers in the Red Sea and a threat from U.S. President Donald Trump to inflict major military punishment on Iran and its allies.
Attacks threaten a second shipping route
The Houthis said they were imposing a naval blockade on Saudi Arabia after hitting the tankers Encelia and Layla. Several tankers then changed course to avoid the Bab el-Mandeb, heading north through the Suez Canal and around Africa on a longer, costlier path to Asia. Shipping insurance costs through the southern Red Sea doubled for some companies on Thursday.
Traffic through the region's main artery also thinned. The number of tankers crossing the Strait of Hormuz fell to just one on Thursday, its lowest since May 7.
Strikes and threats escalate
U.S. forces struck Iran for a 13th consecutive night, prompting Iran to fire at neighbouring Arab countries that host American bases. Trump told Axios he was considering re-launching major combat operations in Iran and was close to a decision: "They haven't received enough pain yet".
Inflation and market fallout
Higher oil prices are stoking inflation globally, adding pressure on Trump's Republican allies before November's congressional elections. The Republican-led House backed legislation on Thursday directing Trump to halt military action against Iran. By July 24, Brent had slipped back below $100 as a selloff in Big Tech names eased and U.S. equity futures steadied.
Sources: Investing.com, Crypto Briefing
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