Key facts
- Brent crude surpassed $100 a barrel due to escalating Houthi attacks in the Red Sea.
- The Bab el-Mandeb shipping route faced potential closure.
- Kazakhstan temporarily cut oil production after suspected drone attacks shut its main Black Sea export terminal.
- The dollar strengthened due to safe-haven demand amid geopolitical tensions and rising oil prices.
- U.S. President Donald Trump vowed to hold Iran responsible for any further attacks on shipping.
- The yen weakened to near 164 against the dollar.
Brent crude prices surged past $100 a barrel, reaching levels not seen since May, as escalating Houthi attacks on commercial shipping in the Red Sea intensified concerns over Middle East supply disruptions. The international benchmark for oil saw its price climb due to these attacks and broader concerns about supply from the region, with the Bab el-Mandeb shipping route, a critical chokepoint, facing potential closure.
Adding to supply worries, Kazakhstan temporarily cut oil production after suspected Ukrainian drone attacks forced its main Black Sea export terminal, the Caspian Pipeline Consortium route, to shut. This route handles approximately 2% of global daily crude supply.
The dollar strengthened against major currencies, reaching a three-week top, driven by safe-haven demand amid the escalating Middle East conflict and rising oil prices, which fueled inflation fears. The yen also weakened, approaching 164 to the dollar.
U.S. President Donald Trump vowed to hold Iran responsible for any further attacks on shipping, while Iran had been pressing the Houthis to close the Bab el-Mandeb gateway if the U.S. continued to attack Iranian power infrastructure. Analysts noted that oil prices act as a tariff, and trade tariffs further contribute to price shocks and supply disruptions.