Global oil prices have surged to a five-month high, reaching $112 per barrel, as recent attacks in Saudi Arabia and incidents in the Gulf region raise concerns over crude oil supply disruptions. Brent crude, the international benchmark, climbed 3% on Thursday following these developments, marking its highest level since mid-May.
The escalation stems from a series of attacks carried out by Yemen’s Houthi movement on targets within Saudi Arabia, resulting in four deaths and eight injuries. The attacks included a civilian airport in Dammam and an oilfield hit by a drone. Additionally, Iran’s Islamic Revolutionary Guard Corps reported striking four vessels in the northern Gulf, accusing them of illegal oil transfers. Mines reportedly affected three other vessels west of the Strait of Hormuz, with Iran warning of potential broader responses if provocations continue.
These incidents have reignited fears over the security of the Strait of Hormuz, a critical artery for global energy supply. Past disruptions in this region have significantly influenced oil prices, which soared to $126 per barrel in April before stabilizing amid ceasefire hopes. While oil exports from the Persian Gulf have surpassed pre-conflict levels, alternative pipeline routes to the Red Sea and Gulf of Oman have mitigated some shipping challenges. However, the renewed instability casts doubt on the ability to maintain stable global supplies.
The spike in oil prices is exerting pressure on financial markets, with major European and Asian stock indices falling on Thursday. Concerns about rising energy costs potentially fueling inflation and sustaining high borrowing costs have contributed to this decline. In the U.S., American Airlines shares dropped following a warning that elevated fuel expenses could lead to a financial loss this year, underscoring the broader economic ramifications of increased oil prices.