Global oil prices have surged to a five-month high, driven by escalating tensions in the Gulf region that threaten to disrupt crude oil supplies. On Thursday, Brent crude, the international benchmark, rose 3% to reach $112 per barrel, marking its highest level since mid-May. This increase follows a series of attacks in Saudi Arabia and reports of vessel incidents in the Strait of Hormuz, a critical passage for global energy shipments.
The unrest began with Yemen’s Houthi movement launching attacks on Saudi targets, resulting in four fatalities and eight injuries, including incidents at a civilian airport in Dammam and an oilfield hit by a drone. Adding to the turmoil, Iran’s Islamic Revolutionary Guard Corps claimed responsibility for striking four vessels in the northern Gulf, accusing them of illegal oil transfers, and reported encounters with mines by three other vessels west of the Strait of Hormuz. Iran warned that further provocations could provoke a broader response against US regional bases.
These developments have reignited fears concerning the security of one of the world’s most vital energy transport routes. Previous disruptions in the Strait of Hormuz had driven oil prices as high as $126 per barrel in April, before prices receded amid hopes for a ceasefire. Despite a recovery in oil exports from the Persian Gulf, with increased pipeline shipments to the Red Sea and Gulf of Oman helping to offset some shipping challenges, the renewed attacks have cast doubt on the stability of global supplies.
The spike in oil prices is also affecting financial markets, with major European and Asian stock indices declining on Thursday due to worries that rising energy costs could exacerbate inflation and maintain elevated borrowing costs. In the United States, American Airlines shares fell following the company’s warning that high fuel expenses might lead to a financial loss this year, underscoring the broader economic impact of the rising oil prices.