Oil prices broke through the $100 per barrel mark for the first time in two months, following an attack claimed by the Iran-backed Houthi group on two Saudi oil tankers in the Red Sea. This action escalates the ongoing Middle East conflict and threatens to cause more severe supply disruptions.
Yemen's Houthi group stated they fired missiles and drones at the vessels as part of a newly announced blockade on Saudi ports.
These strikes open a new front in the region's months-long conflict. The war in Iran has already disrupted shipping through the Strait of Hormuz, the gateway to the Persian Gulf. To navigate those disruptions, Saudi Arabia has relied on shipping via the Red Sea to maintain its oil exports. This latest attack now endangers that critical alternative route.
Simultaneously, the Russia-Ukraine conflict is jeopardizing oil exports from the major producer Kazakhstan. The combined effect of these sustained conflicts has already heavily depleted global oil inventories, setting the stage for a painful price spike.
Brent crude oil futures have surged more than 30% since the beginning of this month and are currently trading near their highest levels since late May.
Pricing data:
As of 9:28 AM New York time, September Brent crude was up 6% at $99.70 per barrel.
September WTI crude rose 4.7% to $90.91 per barrel.
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