Oil prices once again climbed above $98 a barrel on Thursday, as Iran-aligned Houthi militants in Yemen said they had struck two Saudi oil tankers in the Red Sea, raising fears of deeper supply disruptions across key Middle East shipping routes.
As of 06:18 ET (10:18 GMT), Brent crude futures expiring in September, the global oil benchmark, rose 4.7% to $98.50 per barrel, while U.S. West Texas Intermediate (WTI) crude futures climbed 4.2% to $90.44 per barrel.
The Houthis said on Thursday they targeted the Saudi tankers after accusing them of violating a recently announced maritime blockade. Saudi authorities have not confirmed any damage, but the attack was the latest indication of a widening conflict that could threaten global oil shipping.
Earlier this week, the Houthis claimed they would seek to block Saudi-linked vessels from sailing through the Bab el-Mandeb Strait, a busy energy transit chokepoint which connects the Red Sea to the Gulf of Aden.
Any sustained disruption could force tankers to reroute around southern Africa, lengthening voyages and increasing freight costs. Several Saudi crude tankers bound for India and China altered course earlier this week following Houthi warnings.
Meanwhile, the U.S. military completed a new round of strikes on Iran, marking a 12th successive night of attacks, adding to uncertainty around traffic through the Strait of Hormuz. Iran’s Islamic Revolutionary Guards Corps said an explosion occurred along a mined shipping route south of the Strait of Hormuz, adding that one of three oil tankers caught fire while the remaining two vessels reversed course.
Iran has continued to respond to the U.S. strikes, with the IRGC claiming responsibility for attacks on U.S. military targets in Kuwait. Tehran also said it had control over the Strait of Hormuz and that the waterway was "fully closed," warning that oil tankers would not be permitted to transit without prior coordination with Iranian authorities.
Together, the Strait of Hormuz and Bab el-Mandeb Strait handle a significant share of seaborne crude shipments, making them closely watched by energy markets. Traders are focused on transportation risks, rising insurance costs and the possibility of further attacks on tankers or energy facilities.
“[T]he geopolitical situation continues to deteriorate as a second front opens in the Middle East war [...] while [U.S. President Donald] Trump remains stuck, unwilling to escalate to the extent needed to alter conditions on the ground [...], incapable of simply leaving, and unable to tolerate the status quo in perpetuity,” analysts at Vital Knowledge said in a note.
Elsewhere, the U.S. government data showed an unexpected build in crude inventories. The U.S. Energy Information Administration said commercial crude inventories rose by 2.0 million barrels to 411.7 million barrels in the week ended July 17, compared with market expectations for a draw.
Gasoline inventories increased by 0.8 million barrels and distillate stockpiles rose by 1.4 million barrels, while total commercial petroleum inventories climbed 11.6 million barrels.
Source: Investing.com
--Agencies
