The price of Brent crude oil has broken through the $100 per barrel threshold, following a Houthi attack on an oil tanker in the Red Sea that has opened a new front in the Middle East conflict. US President Donald Trump has threatened to expand military strikes against Iran.
On Thursday, the global benchmark hit the three-digit mark for the first time in two months, with futures surging approximately 13% this week. West Texas Intermediate (WTI) crude traded above $92 per barrel. Trump threatened "major military punishment" against Iran and the Houthis if further attacks occur on Red Sea vessels, telling Axios he is considering a "large-scale strike" on Iran.
The market is also grappling with the aftermath of a strike on the Caspian Pipeline Consortium terminal on Russia's Black Sea coast, which exports most of Kazakhstan's oil. Months of conflict in the Middle East have depleted global inventories, heightening the risk of supply shortages and broader economic disruption.
Oil prices have rallied this month as escalating US-Iran hostilities in the Persian Gulf have disrupted shipping through the Strait of Hormuz, hampering crude and LNG supplies. The Houthi militants, backed by Iran, attacked a Saudi oil tanker in the Red Sea for the first time, escalating fears that the scope of supply disruptions in the region could widen further.
"If shipping volumes in the Red Sea become negligible, then we expect oil prices to hit $120, which could be seen as a tipping point," said Jay Hatfield, CEO of Infrastructure Capital Management LLC. "If you can't transport it, you need to conserve it. The way to achieve conservation is through higher prices."
The Red Sea has become a critical alternative export route for Saudi Arabia, allowing it to bypass the Strait of Hormuz and continue shipping millions of barrels of crude to global customers daily. According to traders, some Asian buyers are now in discussions with state-owned Saudi Aramco following the Houthi attack, exploring the possibility of diverting oil flows via the Suez Canal and around Africa.
Brent crude for September delivery edged down 0.07% to $100.62 per barrel. WTI for September delivery inched up 0.01% to $92.20 per barrel.
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Editor: Wang Yongsheng