Oil Climbs as Supply Risks Intensify

Crude oil rose to around $88 per barrel on Thursday, the highest in six weeks, after Iran-backed Houthi militants attacked two Saudi oil tankers in the Red Sea, raising fears of broader supply disruptions across key shipping routes. The group said the vessels were struck with missiles and drones for violating its blockade, while UK Maritime Trade Operations reported a ship caught fire after being hit southwest of Saudi Arabia's Red Sea coast. The attacks marked the first strikes on tankers in the Red Sea, opening a new front in the conflict as shipping through the Strait of Hormuz remains under threat. Meanwhile, US forces launched a 12th straight day of strikes on Iran to curb threats to commercial shipping, while Tehran retaliated by attacking Kuwait. Both sides continued to play down the prospects for peace talks, with President Trump also threatening further strikes on Iranian infrastructure.

Crude oil futures rose up to a six-week high of $88.6 on Wednesday before easing to $86.5 as markets assessed the threat that a blockade of Middle Eastern oil will have on global supply. Strikes between the US and Iran continued to halt oil and fuel exports from the GCC. US Secretary of State Rubio accused Iran of failing to honor previous commitments and emphasized that any future agreement must guarantee freedom of navigation through the Strait of Hormuz and prevent Iran from developing nuclear weapons or supporting militant groups. Also, threats from Yemen’s Houthi rebels against shipping routes in the Red Sea increased fears of further disruptions to international oil trade. On top of that, attacks on the Caspian Pipeline Consortium terminal in the Black Sea added pressure on global energy markets. Still, data from the EIA showed that crude oil stocks unexpectedly rose by 1.4 million barrels last week, contrasting with expectations of a draw.

Crude oil surged 4% to above $87 per barrel on Wednesday, the highest in six weeks, as escalating tensions between the US and Iran increased concerns about global energy supply disruptions. The rise followed the 11th consecutive night of US strikes targeting Iranian military facilities and efforts to prevent threats to commercial shipping through the Strait of Hormuz. US Secretary of State Marco Rubio said Washington remains open to a diplomatic solution but accused Iran of failing to honor previous commitments. He emphasized that any future agreement must guarantee freedom of navigation through the Strait of Hormuz and prevent Iran from developing nuclear weapons or supporting militant groups. Also, threats from Yemen’s Houthi rebels against shipping routes in the Red Sea increased fears of further disruptions to international oil trade. On top of that, attacks on the Caspian Pipeline Consortium terminal in the Black Sea added pressure on global energy markets.