Key facts
- Brent crude surpassed $100 a barrel, reaching $101.01 intraday, amid escalating attacks on shipping in the Red Sea.
- Houthi forces claimed responsibility for striking two Saudi oil tankers in the Bab el-Mandeb Strait.
- The conflict has expanded beyond the Strait of Hormuz, threatening multiple key oil shipping routes.
- Kazakhstan, India, and Russia are experiencing oil production or export constraints due to attacks and disruptions.
- Global strategic reserves have been depleted, commercial inventories are low, and China is drawing on stockpiles.
Brent crude has surged past $100 a barrel, marking a nearly two-month high, as escalating attacks on commercial shipping in the Red Sea intensify concerns over Middle East supply disruptions. The Houthi group claimed responsibility for striking two Saudi oil tankers in the Bab el-Mandeb Strait, a critical chokepoint, after declaring a blockade on Saudi exports. This development has pushed the entire Brent forward curve higher, reflecting traders' pricing in of prolonged supply risks.
The rally is no longer solely driven by fears surrounding the Strait of Hormuz. Disruptions are also impacting other regions, with Kazakhstan cutting production due to drone attacks on a pipeline terminal, Indian refiners suspending Iraqi crude loadings, and Russian fuel exports remaining constrained by Ukrainian drone strikes on refineries. The physical market is tightening, compounded by depleted global strategic reserves, falling commercial inventories, and China's use of pre-war stockpiles.
This return to triple-digit prices for Brent comes after weeks of market bets on easing geopolitical risk, with prices climbing approximately 20% in two weeks. The conflict's expansion from Hormuz to the Red Sea now places two of the world's most vital oil shipping routes under simultaneous threat, unraveling earlier hopes for a normalization of Middle East exports.