Global oil prices have climbed to their highest level in five months due to growing concerns over supply disruptions following recent attacks in the Gulf region. On Thursday, Brent crude, the international oil benchmark, rose by 3% to $112 per barrel, marking its peak since May 18. This surge comes amid heightened tensions following attacks in Saudi Arabia and incidents involving ships near the Strait of Hormuz.
The escalation began with Yemen’s Houthi movement carrying out attacks on Saudi targets on Wednesday, resulting in four deaths and eight injuries. The attacks included strikes on a civilian airport in Dammam and an oilfield targeted by a drone. Concurrently, Iran’s Islamic Revolutionary Guard Corps claimed responsibility for striking four vessels in the northern Gulf, accusing them of participating in illegal oil transfers. Additionally, three other vessels were reportedly affected by mines west of the Strait of Hormuz. Iran has warned that further provocations could lead to broader retaliatory actions against U.S. regional bases.
These incidents have reignited worries about the security of the Strait of Hormuz, a crucial corridor for global energy transportation. Earlier disruptions in this vital waterway had previously pushed oil prices to $126 per barrel in April before prices eased on hopes of a ceasefire. Despite this, oil exports from the Persian Gulf have managed to recover beyond pre-conflict levels, thanks in part to increased pipeline shipments to the Red Sea and Gulf of Oman. However, the renewed attacks bring uncertainty about whether global oil supplies can remain stable.
The impact of rising oil prices is being felt across financial markets, with major stock indices in Europe and Asia facing declines on Thursday. This trend is fueled by concerns that higher energy costs could exacerbate inflation and maintain elevated borrowing costs. In the U.S., American Airlines has warned that the surge in fuel prices might lead to a financial loss for the company this year, exemplifying the broader economic implications of the oil price hike.