SINGAPORE: Oil prices hit their highest in nearly two months on Thursday, rising for a fifth day after Yemen’s Houthis said they struck two Saudi oil tankers, widening disruption to global oil shipping through both the Red Sea and the Strait of Hormuz.
Brent crude futures were up by $5.83, or 6.2 percent, at $99.90 a barrel by 04:10 p.m. Saudi time after reaching $100 a barrel for the first time since late May.
US West Texas Intermediate crude rose $4.41, or 5.08 percent, to $91.24, exceeding $90 a barrel for the first time since June 11.
“The immediate outlook for crude oil remains supportive as markets price a worrying probability of supply interruptions in a second chokepoint,” said Pepperstone research strategist Ahmad Assiri.
Besides the renewed conflict over control of the Strait of Hormuz, Yemen’s Houthis have opened a new front 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 militia attacked two Saudi Arabian oil tankers in a military operation, the group said on Thursday, with a Saudi news agency later confirming 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 route they described as mined, south of the Strait of Hormuz, while two others had turned back.
In a statement the Guards said the strait was under their control and “completely closed” while US actions continued in the region, warning that no tanker would be allowed to enter or leave without coordination with Iran.
Besides the renewed conflict over control of the key waterway, the Iran-aligned Houthis have opened a new front by threatening to target vessels carrying Saudi oil in the Bab el-Mandeb strait and unveiling a naval blockade of Saudi Arabia.
Oil prices are facing a rare risk from simultaneous disruptions at both the Bab el-Mandeb and the Strait of Hormuz, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
“Geopolitical premiums have returned, but a sustained (price) rally will require evidence of prolonged shipping disruptions or meaningful supply outages.”
The Houthis said they had carried out a military operation targeting two Saudi oil tankers, and maritime security reports said one of the vessels identified by the group, the Saudi-flagged tanker Encelia, had been hit in the Red Sea.
The Houthis said they had forced about 10 ships to retreat and return after warning vessels against sailing to Saudi ports.
Reuters could not immediately verify this account.
The Houthis’ naval blockade of Saudi Arabia in the Red Sea threatens to disrupt global energy supplies beyond the Gulf, while Iran’s Revolutionary Guards’ spokesperson also warned shipping companies that the Strait of Hormuz southern route is mined in a post on X.
The new threat to Red Sea passage could interrupt up to 5 million barrels per day of oil supply, and the main route for Gulf oil that bypasses the Strait of Hormuz, said Saul Kavonic, the head of energy research at MST Marquee.
The US military said it completed its 12th consecutive night of attacks on Iran hours after President Donald Trump vowed to destroy an Iranian bridge or power plant every time Iran shoots at a ship in the Strait of Hormuz, raising the stakes in the war with Iran.
Meanwhile, European diesel margins hit a record $66.25 a barrel on July 17, supported by Russia’s diesel export ban following repeated Ukrainian attacks on its refineries and concerns over further disruptions to Middle East supplies, and traded as high as $65.30 a barrel on Thursday.
