Brent Hits $100 Per Barrel as Red Sea Attacks Stoke Supply Fears

By Adedapo Adesanya

Brent crude jumped over $100 per barrel on Thursday, rising by $6.62 or 7 per cent to $100.69 per barrel, as Yemen’s Houthis attacked two Saudi oil tankers in the Red Sea, causing further global supply disruptions following a near-halt in trade ‌through the Strait of Hormuz.

The international crude oil benchmark has now climbed roughly 20 per cent in about two weeks as repeated attacks on commercial shipping, renewed fighting involving Iran, and mounting export disruptions have steadily erased expectations of a quick return to normal oil flows.

Also, the US West Texas Intermediate (WTI) crude chalked up $5.36 or 6.2 per cent to settle at $92.19 a barrel.

Houthi claimed that the group struck two Saudi oil tankers in the Bab el-Mandeb Strait after declaring a naval blockade of Saudi exports earlier this week.

Several vessels reportedly altered course or delayed transits through the chokepoint, threatening the export route Saudi Arabia has relied on to bypass disruptions in the Strait of Hormuz.

Market analysts noted that the escalation adds to the near-halt in Hormuz traffic and the sharp reduction in Iranian exports, ​intensifying concerns over near-term global availability.

Analysts estimate that the Strait of Hormuz and Bab el-Mandeb carry the equivalent of roughly a ​quarter of the world’s oil supply.

As a result of fewer shipments exiting the strait, loading activity within the Gulf has fallen to 2.5 million barrels per day over the past seven days, compared with 6 million barrels per day over the past 30 days

However, following the attacks, two Chinese supertankers carrying a combined 4 million barrels of Saudi Arabian oil managed to exit the Red Sea via the Bab el-Mandeb Strait ‌on Thursday.

Meanwhile, US President Donald Trump promised “major military punishment” for Iran and its Houthi allies.

Goldman Sachs said Brent might exceed $120 a barrel in the fourth quarter and average $100 next year if the strait remains disrupted through 2027, with further upside if the Bab el-Mandeb Strait and Suez Canal also suffer persistent disruption.

Kazakhstan has begun cutting oil production after drone attacks shut down tanker loadings at the Caspian Pipeline Consortium terminal on the Black Sea.

Amid this development, seven core members of the Organisation of the Petroleum Exporting Countries and its allies (OPEC+), namely Saudi ⁠Arabia, Russia, ​Iraq, Kuwait, Algeria, Kazakhstan and Oman, are likely, when they meet on August 2, to increase their ​output target by about 188,000 barrels per day for September.