Global oil prices surged to a five-month high on Thursday, driven by escalating tensions in the Gulf region that have sparked fears of further disruptions to crude oil supplies. Brent crude, the international benchmark, rose 3% to reach $112 per barrel, marking its highest level since May 18.
The price increase follows a series of attacks in Saudi Arabia and reports of vessel incidents near the Strait of Hormuz. Yemen’s Houthi movement claimed responsibility for attacks on Saudi targets on Wednesday, resulting in four fatalities and eight injuries, including casualties at a civilian airport in Dammam and a drone attack on an oilfield.
Adding to the regional instability, Iran’s Islamic Revolutionary Guard Corps reported that its forces had targeted four vessels in the northern Gulf, accusing them of illegal oil transfers. The Corps also noted that three additional vessels encountered mines west of the Strait of Hormuz, cautioning that further provocations could lead to broader military responses against US bases in the area.
The heightened tensions have renewed concerns about the security of the Strait of Hormuz, a critical energy shipping route. Previous disruptions in this area had caused oil prices to spike, with crude reaching $126 per barrel in April before a subsequent decline as hopes for a ceasefire emerged.
Despite a recovery in oil exports from the Persian Gulf to levels above those before the conflict, increased pipeline shipments to the Red Sea and Gulf of Oman have somewhat mitigated shipping disruptions. However, the recent attacks have cast doubt on the stability of global supplies.
The rise in oil prices has had a significant impact on financial markets, with major European and Asian stock indices declining on Thursday amid concerns that increasing energy costs could exacerbate inflation and maintain high borrowing costs. American Airlines also reported a drop in its shares, warning that elevated fuel expenses could lead to a financial loss this year, underscoring the broader economic implications of the oil price surge.