Topline
Global oil prices soared above $98 per barrel on Thursday as Iran-backed Houthi militants targeted Saudi Arabian tankers in the Red Sea, marking the latest escalation in the U.S.-Iran war as Secretary of State Marco Rubio said Tehran is not ready to make a deal.
Key Facts
The global benchmark Brent Crude futures index soared to $98.45 per barrel on Thursday, up from around $90 at the start of the week.
Oil prices are now approaching the highest level they have been in over two months, as the renewed conflict has sharply reversed a decline that was triggered by the interim peace deal last month.
The U.S. benchmark West Texas Intermediate also soared to touch $90 per barrel for the first time in over a month.
The latest spike follows a drone and missile attack on two Saudi oil tankers attempting to cross the Bab Al-Mandeb strait—a key choke point that connects the Red Sea to the Indian Ocean.
The government-run Saudi Press Agency acknowledged the attack on one of the tankers, Encelia, noting that it resulted in a “fire at the bow of the vessel” but all crew members were safe.
What About U.S. Gas Prices
The national average gas price in the U.S. rose to $4.09 per gallon on Thursday, according to AAA’s tracker—up from $3.94 per gallon last week. On Monday, average gas prices topped $4 per gallon for the first time in over a month. The continued rise in gas prices is likely to further frustrate President Donald Trump, who has complained about high gas prices in recent weeks, even accusing oil companies of price gouging, and has threatened to expand the war against Iran.
Tangent
Rubio addressed the conflict on the sidelines of the Association of Southeast Asian Nations (ASEAN) summit of foreign ministers in Manila and claimed that Iran was “begging us, both directly and indirectly” for a deal. However, the secretary of state claimed that Iran didn’t appear to be “ready to make a deal” because every time they agree to one, “people in charge either break it or they want to change it.” On the Houthi attacks, Rubio said he hoped they would stop and added: “They shouldn’t really do that. They got suckered into this by the Iranians.”