Key facts
- Oil prices reached their highest levels in over a month on Thursday.
- Yemen's Houthis claimed responsibility for striking two Saudi oil tankers.
- The attacks have widened disruptions to global oil shipping through the Red Sea and Strait of Hormuz.
- Brent crude futures rose 4.86% to $98.64 a barrel, and WTI crude climbed 4.46% to $90.70 a barrel.
- An oil tanker experienced an explosion and fire near Oman in the Strait of Hormuz.
Oil prices surged to their highest in over a month on Thursday, marking five consecutive days of gains, following claims by Yemen's Houthis that they had attacked two Saudi oil tankers. This incident has heightened concerns over global oil shipping disruptions, particularly through the Red Sea and the Strait of Hormuz.
Brent crude futures climbed 4.86% to $98.64 a barrel, reaching their highest since June 3. U.S. West Texas Intermediate (WTI) crude rose 4.46% to $90.70 a barrel, hitting its highest since June 11.
Analysts noted that the immediate outlook for crude oil remains supportive, with markets pricing in a higher probability of supply interruptions at a second chokepoint. The Houthis have opened a new front by targeting vessels carrying Saudi oil in the Bab el-Mandeb Strait, in addition to existing concerns over the Strait of Hormuz. Shipping data indicated that two Chinese supertankers carrying a combined 4 million barrels of Saudi oil were exiting the Red Sea via the Bab el-Mandeb Strait.
Goldman Sachs suggested that Brent crude could exceed $120 a barrel in the fourth quarter and average $100 next year if the Strait of Hormuz remains disrupted through 2027, with potential for further upside if the Bab el-Mandeb Strait and Suez Canal also experience persistent disruption. Meanwhile, Iran's Revolutionary Guards reported an oil tanker caught fire after an explosion near Oman in the Strait of Hormuz, stating the strait was under their control and closed. The U.S. military confirmed ongoing attacks on Iran, with President Donald Trump vowing retaliation for any attacks on ships in the Strait of Hormuz.
Goldman Sachs also anticipates oil prices will maintain most of their recent gains through July and August due to declining global inventories, reduced Middle East production, seasonal summer travel demand, and slower releases from strategic petroleum reserves. Separately, European diesel margins reached a record $66.25 a barrel on July 17, influenced by Russia's diesel export ban and concerns over Middle East supply disruptions.