Oil prices rise as Trump threatens military action against Iran, following Houthi attacks on Saudi tankers. Brent crude reaches $100 per barrel.
Oil prices rise as Trump threatens military action against Iran, following Houthi attacks on Saudi tankers. Brent crude reaches $100 per barrel.
Oil prices spiked higher Thursday following reports of attacks on tankers in the Red Sea and renewed threats by the U.S. to escalate strikes against Iran.
Brent crude futures crossed the $100 per barrel mark for the first time since May 26, rising 6.4% to $100.08 per barrel as of 10:18 a.m. ET.
Meanwhile, U.S. West Texas Intermediate crude saw an increase of about 5%, reaching $91.26 per barrel, marking its highest level since June 11. Oil prices have surged over 30% this month amid escalating fighting in the Middle East.
Iran’s Houthi allies in Yemen announced they targeted two Saudi oil tankers with drones and missiles in response to a maritime blockade they imposed against Riyadh.
In a statement, President Donald Trump indicated that the U.S. would hold Iran accountable for any future Houthi attacks on vessels in the Red Sea, warning of “major military punishment” against Tehran and its allied militants in Yemen.
These attacks occurred shortly after Trump declared that each Houthi attack on a ship in the Strait of Hormuz would result in the destruction of an Iranian bridge or power plant.
Iran responded to the threats by cautioning that it would retaliate against U.S.-linked infrastructure and energy assets in the region if the strikes occurred. An unnamed Iranian military source told the state-run Tasnim News Agency, “If the Americans target a bridge or a power plant in Iran, Iran will, in turn, strike infrastructure and bridges in the region, including energy facilities where the United States has interests.”
The conflict has escalated, with the U.S.-Iran tension deepening as fighting spills over to the Red Sea while Iran has targeted key infrastructure in the Gulf, including critical water desalination plants. Helima Croft, global head of commodity strategy at RBC Capital Markets, stated, “Extreme pressure is building in the Middle East that could send Brent oil prices above the 2022 high of $128 per barrel after Russia invaded Ukraine.”
Croft also noted that Brent could exceed the 2008 peak of $146 per barrel if the situation deteriorates into full-scale regional war.
Adding to the market pressures, the ongoing Ukraine-Russia conflict is impacting global oil markets. Croft mentioned that Kyiv has reportedly attacked over 150 tankers in the Black Sea and Sea of Azov this month, which has led to the Caspian Pipeline Corporation suspending crude loading at its Black Sea terminal.
The closure is particularly concerning for Kazakhstan, as about 80% of its crude is exported through this pipeline. “The duration of closure remains uncertain, but alternate routes for Kazakhstan are limited, meaning production could face shut-ins,” Croft added, highlighting the impacts of the conflict on global oil supply.
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