Oil prices posted their biggest single-day jump in weeks as the Houthi naval blockade spread beyond the Strait of Hormuz for the first time
Xinhua News Agency / Getty Images
Brent crude futures broke through the $100-a-barrel threshold Thursday for the first time in roughly two months, after Yemen's Houthi rebels claimed strikes on two Saudi Arabian oil tankers in the Red Sea. At 9:15 a.m. ET, Brent had gained 6.4% to reach $100.05 a barrel. U.S. West Texas Intermediate futures climbed more than 5% to $91.08 a barrel, a level not seen since June 11.
The Houthis said they targeted the vessels with drones and missiles for allegedly violating their maritime blockade of Saudi Arabia. The United Kingdom Maritime Trade Operations posted on X $TWTR that a tanker had been hit about 70 nautical miles southwest of Al Shuqaiq; the resulting fire was being battled by the crew, and no casualties were reported. CNBC was not able to independently verify the attacks. According to NBC News, Saudi state media reported that a vessel called the Encelia was set ablaze in an overnight attack, citing an unidentified source from the General Authority of Transport.
If confirmed, the attacks would mark the first time since the Houthis announced their naval blockade that ship strikes have spread beyond the vicinity of the Strait of Hormuz, according to NBC News. Roughly 12% to 15% of all global maritime trade — valued at over $1 trillion — moves through the Bab el-Mandeb strait annually, near where the tankers were struck.
The tanker strikes came hours after President Donald Trump threatened to destroy an Iranian bridge or power plant for every vessel attacked by Tehran in the Strait of Hormuz. Iran responded by threatening to target infrastructure and energy assets in areas where the U.S. holds interests, according to CNBC, which cited an unnamed Iranian military source speaking to state-run Tasnim News Agency.
Thursday's rally left Brent tracking a roughly 36% monthly advance, which would place it among the three biggest such gains recorded over the past ten years. Since the start of July, oil prices have risen about 35%. The nationwide average price at the pump climbed to $4.09 a gallon Thursday from $4.06 the previous day, drawing on figures from AAA.
The breakdown of the U.S.-Iran ceasefire struck in June set the current escalation in motion. Iran attacked a commercial vessel in the Strait of Hormuz in early July, prompting U.S. retaliatory strikes, and shipping traffic through the strait fell to single-digit crossings on Tuesday. The U.S. also reimposed a naval blockade of Iranian ports and announced a 20% fee on cargo transiting the strait.
The core dispute over who administers traffic through the strait remains unresolved, HSBC senior global oil and gas analyst Kim Fustier said in a note. Secretary of State Marco Rubio said Wednesday that Iran had shown no genuine willingness to negotiate with Washington, even as he insisted the U.S. had not abandoned its diplomatic efforts.
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