Global oil prices have reached a five-month high, driven by rising tensions in the Gulf region. On Thursday, Brent crude, the international oil benchmark, surged by 3% to $112 per barrel, its highest level since mid-May. This increase follows a series of attacks and incidents that have raised concerns about potential disruptions to crude oil supplies.
The recent escalation in tensions began with attacks carried out by Yemen’s Houthi movement on Saudi Arabian targets. These assaults resulted in the deaths of four individuals and injuries to eight others, including casualties at a civilian airport in Dammam and an oilfield targeted by drones. Additionally, Iran’s Islamic Revolutionary Guard Corps reported that it had struck four vessels in the northern Gulf, accusing them of participating in illegal oil transfers. The Corps also noted that three other vessels encountered mines near the Strait of Hormuz, a critical energy shipping route, and issued warnings of possible broader responses against US regional bases.
Such developments have amplified concerns about the security of oil transport through the Strait of Hormuz, a key maritime chokepoint. Past disruptions in this area have historically driven oil prices higher, with crude peaking at $126 per barrel in April before falling back as hopes for a ceasefire emerged. Despite a recovery in oil exports from the Persian Gulf to above pre-conflict levels, recent assaults have reignited uncertainties about the stability of global oil supplies.
The ripple effects of these heightened oil prices are being felt across financial markets. On Thursday, major stock indices in Europe and Asia saw declines amid fears that escalating energy costs could drive inflation and maintain high borrowing costs. In the United States, American Airlines shares dropped after the company warned that soaring fuel prices could result in a financial loss for the year, underscoring the broader economic impact of the current oil market volatility.