Global oil prices surged to a five-month high on Thursday, driven by escalating tensions in the Gulf region that have raised concerns over potential disruptions to crude oil supplies. Brent crude, the international benchmark, increased by 3% to reach $112 per barrel, its highest level since mid-May.
The price spike was largely attributed to a series of attacks in Saudi Arabia, alongside incidents involving vessels near the strategically significant Strait of Hormuz. Yemen’s Houthi movement claimed responsibility for assaults on Wednesday that targeted locations in Saudi Arabia, resulting in four deaths and eight injuries. These attacks included a drone strike on an oilfield and an incident at a civilian airport in Dammam.
In addition, Iran’s Islamic Revolutionary Guard Corps reported that its forces had targeted four vessels in the northern Gulf due to their alleged involvement in illegal oil transfers. The Corps also noted that three other vessels had encountered mines west of the Strait of Hormuz, issuing a warning that further provocations could prompt a broader response against U.S. regional bases.
The escalation of hostilities has reignited fears regarding the security of the Strait of Hormuz, one of the world’s most crucial energy shipping routes. In the past, disruptions in this area have significantly impacted oil prices, which soared to $126 per barrel in April before receding amid hopes for a ceasefire.
While oil exports from the Persian Gulf have rebounded above pre-conflict levels, increased pipeline shipments to the Red Sea and Gulf of Oman have partially mitigated shipping disruptions. Nevertheless, the renewed attacks have introduced uncertainty about the stability of global oil supplies.
The surge in oil prices has also exerted pressure on financial markets. Major European and Asian stock indices declined on Thursday amid concerns that escalating energy costs could exacerbate inflation and sustain high borrowing costs. American Airlines shares fell as well, following a warning from the company that the elevated fuel expenses might lead to financial losses this year, underscoring the broader economic implications of rising oil prices.