Global oil prices reached their highest level in five months on Thursday, driven by escalating tensions in the Gulf region that threaten to disrupt crude oil supplies. Brent crude, the international benchmark, climbed by 3% to hit $112 per barrel, marking the highest price since May 18. The latest surge follows a series of attacks in Saudi Arabia and incidents involving multiple vessels near the Strait of Hormuz.
Yemen’s Houthi movement launched attacks on Wednesday targeting locations in Saudi Arabia, resulting in four fatalities and eight injuries. The attacks included a civilian airport in Dammam and an oilfield that was struck by a drone. Concurrently, Iran’s Islamic Revolutionary Guard Corps reported that four vessels in the northern Gulf were targeted over alleged involvement in illegal oil transfers. Additionally, three other vessels encountered mines west of the Strait of Hormuz, with Iran warning that further provocations could lead to a broader response against US bases in the region.
The increased tension has renewed global concerns over the security of the Strait of Hormuz, a critical passage for the world’s energy supply. Previous disruptions in this vital shipping lane pushed crude prices to as high as $126 per barrel back in April, before hopes of a ceasefire led to a decline. Despite a recovery in oil exports from the Persian Gulf to above pre-conflict levels, the ongoing attacks have heightened uncertainty about the stability of global supplies.
Rising oil prices have also exerted pressure on financial markets. Major stock indices in Europe and Asia experienced declines on Thursday amid fears that higher energy costs could contribute to inflation and maintain elevated borrowing costs. In the United States, American Airlines shares dipped after the company cautioned that soaring fuel expenses might result in a financial loss this year, underscoring the broader economic impacts of rising oil prices.