Oil climbed to a six-week high on Thursday as fresh US strikes on Iran and a Houthi blockade of Saudi shipping stacked a heavy risk premium back onto crude. Threats to two of the world's most important chokepoints — the Strait of Hormuz and the Bab el-Mandeb — hit tanker traffic in the same session. A surprise build in US crude inventories was likely to be overshadowed by the geopolitical headlines.
Two of the world's most important shipping chokepoints came under active threat in a single session, and oil prices jumped to their highest level in more than six weeks. Brent crude futures for September delivery gained 2% to $95.99 a barrel, while US West Texas Intermediate advanced around 1.7% to $88.27. Brent reached its strongest level since early June, building on a similarly sharp gain the day before.
US strikes deepen the Iran conflict
The US military confirmed a 12th consecutive night of strikes on Iran, hours after President Trump renewed his warning that Washington would destroy an Iranian bridge or power plant for every attack on a vessel crossing the Strait of Hormuz. The threat deepens a conflict that has already surpassed $37 billion in cost and drawn a growing US military buildup across the region. Iran, in turn, warned it would strike US-linked infrastructure and energy assets in the region if Washington carried out those strikes.
Iran claims control of Hormuz
Iran's Revolutionary Guards said an oil tanker had caught fire after an explosion while trying to cross a route they described as mined, south of the strait, and that two more tankers turned back. The Guards declared the waterway under their control and effectively closed, warning that no vessel could enter or exit without coordinating with Iran. If sustained, that would mark a major escalation, given the strait normally carries roughly a fifth of global oil shipments.
Houthis open a second front
The Iran-aligned Houthis added pressure by threatening vessels carrying Saudi oil through the Bab el-Mandeb Strait and declaring a naval blockade of Saudi Arabia. The group said it had struck the Saudi-flagged tankers Encelia and Layla and forced around 10 vessels to abandon plans to reach Saudi ports, an account Reuters said it could not independently verify. Against that backdrop, US crude stocks rose by around 2 million barrels last week versus an expected draw, a build likely to be overshadowed by the geopolitical headlines.
Sources: investingLive, CNBC
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