Brent crude oil surged Thursday to $100 a barrel for the first time since May following reported Houthi attacks on vessels in the Red Sea – fueling concerns that global energy supplies could get even more badly disrupted.
Brent crude oil prices had soared 7.1% to $100.74 a barrel as of about 10:50 a.m. ET, while West Texas Intermediate crude jumped 5.3% to $91.40 – setting the benchmarks up for huge monthly gains of roughly 40% and 30%, respectively.
Oil prices were already climbing this week as traders grew concerned over a breakdown in peace talks between the US and Iran and renewed hostilities in the Strait of Hormuz, a vital maritime route for 20% of the world’s oil supplies that has been largely blockaded for months.
Reports of fresh strikes in the Red Sea raised new fears that a second critical shipping route through the Bab el-Mandeb Strait, which carries about 7% of global oil supplies, could also be compromised – multiplying what is already the world’s worst-ever supply disruption.
The United Kingdom Maritime Trade Operations posted on social media Thursday that a tanker was hit around 70 nautical miles off the coast of Saudi Arabia, sparking a fire onboard that the crew was fighting.
There were no reported casualties.
Yemen’s Houthis, an Iranian-backed militant group, claimed the attack, saying they fired at two vessels in the Red Sea for allegedly violating their maritime blockade against Saudi Arabia.
Joe Adamski, managing director of ProcureAbility, a supply chain consultancy, told The Post it is “difficult to say for sure” where oil prices are headed since it is “unclear if the Houthis can maintain any kind of a blockade or effectively target shipping and/or Saudi export infrastructure.”
“If the shooting continues, pricing will stay above $100, probably into the $110 to $120 range,” Adamski said. “If that stabilizes or appears manageable, I’d expect to see mid-$80s.”
Jeff Krimmel, founder of Krimmel Strategy, warned that oil prices could keep rising as long as fighting continues in the Red Sea and the Persian Gulf, and both sides continue to trade threats.
“When the direction of travel is toward more conflict, as it is right now, there is no safe ceiling above oil prices,” he told The Post.
“For oil prices to drop, we would need indications of real ongoing diplomacy between the US and Iran,” though a “robust agreement” is not necessary, Krimmel added.
“The market has been clear it will give both sides the benefit of the doubt. We simply need to see a meaningful embrace of diplomacy for oil prices to drop.”
The Houthi attacks have not yet been independently confirmed.
President Trump on Thursday vowed to hold Iran responsible for any attacks by the Houthis – saying he was “very disappointed with” the rebels who “have, until now, acted very professionally and smart” during the war with Tehran, which began Feb. 28.
“Please let this TRUTH serve to represent that if they do this again, the U.S. will hold Iran responsible, in that the Houthis are a Surrogate and/or Proxy of Iran, and major military punishment will be inflicted upon Iran and, of course, the Houthis, themselves,” the president wrote in a Truth Social post.
Secretary of State Marco Rubio told reporters in the Philippines on Thursday that the Houthis were making a mistake getting involved in the Middle East conflict, saying they had been “smart” to largely stay out of the war with Iran.
He claimed that one of the vessels struck by the Houthis had actually been “flagged Chinese,” so the militant organization has risked angering another major world power.
The reported Red Sea attacks came just hours after Trump threatened to destroy an Iranian bridge or power plant each time Iran fires at a ship in the Strait of Hormuz, further escalating tensions.
Tehran responded that it would retaliate against US-affiliated infrastructure and energy assets throughout the region if Washington carries out such strikes.
Traders have grown more concerned about a lasting energy crisis since Trump earlier this month announced a ceasefire deal with Iran was “over,” saying he no longer wanted to deal with “sick people.”
On Wednesday, Rubio said Iran was not being “serious” about reaching a peace agreement.