LONDON — Oil has topped $100 a barrel for the first time in two months, as a fresh escalation of the Middle East conflict threatens a further squeeze on global oil supplies.
Brent crude, the global oil benchmark, jumped more than 6% Thursday to briefly touch $100.14 a barrel, before pulling back just a bit. West Texas Intermediate, the US benchmark, was up almost 5% to $90.98 a barrel.
Brent has surged by around $27 a barrel this month, a gain of more than a third. It last settled above $100 on May 22, according to FactSet.
The oil price peaked at $126 a barrel in April during the conflict, but fell back below $100 in late May and had fallen to as low as $71 at the start of July amid hopes of a ceasefire in the region.
Fears about global oil supply are resurfacing after Yemen’s Houthi rebels targeted ships in the Red Sea, crucial for Saudi Arabia’s oil exports.
The Iran-aligned militia said on Thursday they attacked Saudi-owned oil tankers, the Encelia and Layla, accusing the crews of violating a naval blockade imposed by the group in the Red Sea.
The Kingdom has been sending about 4 million to 5 million barrels of oil via the Red Sea and Bab al-Mandeb strait, bypassing the Strait of Hormuz, according to analysts. That lifeline for the global oil market is now at risk.
Streams of tankers and cargo vessels continue to traverse the Bab al-Mandeb Strait, which connects the Red Sea and Gulf of Aden, even as Yemen’s Houthi rebels threaten to blockade the critical waterway.
US President Donald Trump said on Thursday that Washington would hold Iran responsible for any future attacks by the Iran-backed Houthis in the Strait of Hormuz, warning of “major military punishment” if the group targets ships again.
Trump’s warning comes after the Houthis claimed responsibility for striking two Saudi oil tankers in the Red Sea, days after announcing a naval blockade targeting Saudi vessels.
“(If) they do this again, the US 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, who I am very disappointed with in that they have, until now, acted very professionally and smart,” Trump wrote in a Truth Social post.
Meanwhile, Iranian forces launched a drone assault on northern Kuwait on Thursday, according to the Kuwaiti defense ministry, as Tehran escalated strikes on US-allied Gulf nations.
The attack at the Abdali border crossing with Iraq “resulted in material damage,” ministry spokesperson Major General Saud Abdulaziz said in a statement.
No one was injured or killed, the statement added, stressing the Kuwaiti armed forces’ “ongoing readiness and constant preparedness to protect the nation’s borders.”
Other Gulf nations that host US military bases, including Bahrain, have come under repeated Iranian fire in recent days – after Washington escalated its assault on Iran following Tehran’s attacks on vessels in the Strait of Hormuz.
Source: Saudi Gazette