Oil prices climbed toward $100 a barrel on Thursday after Yemen’s Iran-aligned Houthis claimed missile and drone strikes on two Saudi oil tankers in the Red Sea, opening a second front in the sea lanes that carry much of the world’s crude.
The attacks push the threat to energy supply beyond the Strait of Hormuz, where the U.S.-Iran war has already disrupted tanker traffic, toward the Bab el-Mandeb Strait at the southern mouth of the Red Sea. Fighting between Washington and Tehran escalated after an interim deal to reopen Hormuz collapsed, and Saudi Arabia diverted millions of barrels a day to the Red Sea in response. A threat to that corridor squeezes both of the kingdom’s main export outlets at once.
What the Houthis claimed and what Saudi Arabia confirmed
Houthi military spokesman Yahya Saree said Wednesday the group targeted two tankers, the Encelia and the Layla, for breaking a shipping ban it declared on the kingdom. He described the campaign as “an eye for an eye.” The Layla is a supertanker operated by the Saudi shipping company Bahri; the Encelia is a smaller products tanker.
Saudi state media confirmed a fire on the bow of the Encelia and said the crew was safe, without naming an attacker. Britain’s UK Maritime Trade Operations logged a tanker hit by a projectile off the Saudi coast, with the crew fighting a fire and no reported casualties.
The strike on the second vessel, the Layla, remains unverified. Its tracking signal had been switched off since July 17, days before the claimed attack, leaving no independent confirmation.
How the Red Sea threat reaches the oil market
Ships are already rerouting. At least seven tankers changed course this week to avoid Bab el-Mandeb, with several turning back toward the Suez Canal. The strait, one of the world’s busiest oil passages, links the Red Sea to the Gulf of Aden.
The Houthis declared a maritime embargo on Saudi Arabia on July 20, in retaliation for what they call a long siege of Yemen and a July 13 strike on Sanaa’s airport that broke a fragile calm. Saudi Arabia’s Red Sea export terminal at Yanbu is fed by the east-west Petroline, the only pipeline route around Hormuz. A blocked Red Sea would force crude onto longer, costlier voyages around southern Africa.
Brent and WTI jump on the supply premium
Brent crude jumped more than 5% to nearly $99 a barrel on Thursday, its highest since June 3, and U.S. crude rose above $90. Prices are up close to 20% since the latest escalation began about two weeks ago.
Analysts tie the move to a geopolitical risk premium rather than stronger fuel demand. ANZ called the Red Sea strike a sharp escalation of the conflict, and some traders see room toward $100 if the disruption widens.
The Iran front and the week’s data
U.S. Central Command said it struck Iranian targets for a 12th straight night on July 22, hitting missile and drone sites and air defenses. The two conflicts, the United States and Iran around Hormuz and the Houthis and Saudi Arabia in the Red Sea, now press on the same barrels.
In natural gas, U.S. futures edged higher before the weekly storage report, due July 23 at 10:30 a.m. ET and expected to show a build near 29 billion cubic feet. Traders are watching Tropical Storm Bertha, which made landfall in Louisiana on July 22, for any hit to Gulf Coast liquefied natural gas export terminals.
