Brent crude oil prices surged more than 6% in late Thursday trading to breach the $100-per-barrel threshold, reaching their highest level in eight weeks, as Tehran-backed Houthi rebels claimed attacks on two Saudi oil tankers navigating the Red Sea. US crude simultaneously climbed for a second consecutive session, rising more than 5% to nearly $92 a barrel, its highest level since June 11, according to The Economic Times. The attacks represent a significant escalation in the ongoing conflict, marking a geographical widening of hostilities that had previously been concentrated around the Strait of Hormuz.
The Houthi group had earlier announced a naval blockade on Saudi Arabia, and the latest strikes suggest the threat is now spreading to open a second front in the Red Sea, compounding existing pressures on global energy markets. The strategic importance of the Red Sea route cannot be overstated. The Bab el-Mandeb strait, which connects the Red Sea to the Gulf of Aden, serves as a critical artery for global energy flows, with millions of barrels of oil transiting through it on their way to international markets.
The waterway also carries approximately 12% to 15% of global maritime trade, valued at more than $1 trillion annually. The route has also been serving as an alternative corridor while traffic through the Strait of Hormuz remains disrupted, with ship crossings through Hormuz having fallen to single digits on Tuesday. The United Kingdom Maritime Trade Operations confirmed that a tanker had been struck by an unknown projectile north of the Bab el-Mandeb strait.
Saudi state media separately reported that the tanker Encelia was set ablaze in an overnight Red Sea attack, citing an unidentified transport authority source. Oil prices have now risen approximately 35% since the start of the month and are up more than 60% year-to-date, according to data cited by The Economic Times. The relentless rally has had direct consequences for consumers: the national average price of gasoline in the United States climbed to $4.09 per gallon on Thursday, up from $4.06 the previous day, according to AAA data tracked by NBC News.
The latest price surge has effectively erased the relief that had followed a memorandum of understanding signed between the United States and Iran in mid-June. That agreement has since collapsed. President Donald Trump on Wednesday threatened to target an Iranian bridge or power plant for every vessel attacked by Tehran, a statement that was followed within hours by the Houthi claims of hitting the two tankers.
The dramatic run-up in crude prices is feeding broader macroeconomic concerns. The oil surge has intensified inflation fears and pushed bond yields sharply higher. The US 10-year Treasury yield traded at 4.67% in early Thursday trading, its highest level since January 2025, underscoring the extent to which energy market volatility is now reverberating across global financial markets.
Source: The Economic Times / ETMarkets.com, reporting by Akash Podishetti.
Source: m.economictimes.com