Oil Markets Surge After Houthi Attack on Saudi Tankers and Strait of Hormuz Shipping Halt; Brent Crude Soars 7% Back Above $100

Yemen's Houthi armed group claimed military attacks on two Saudi Arabian oil tankers in the Red Sea, while shipping through the Strait of Hormuz has nearly halted, escalating global crude supply risks and triggering a sharp rise in international oil prices on Thursday (23rd). Brent crude futures closed above the $100 per barrel mark for the first time since May, marking a significant rebound in energy markets.

London-traded Brent crude futures surged $6.62, or 7%, closing at $100.69 per barrel—the highest closing level since May 22. Since the outbreak of Iran-related hostilities in February, Brent crude has climbed nearly 40%, with almost all of that gain concentrated in the current month.

U.S. West Texas Intermediate (WTI) crude futures also rose sharply, gaining $5.36 (6.2%) to settle at $92.19 per barrel, the highest close since June 4.

Bob Yawger, head of energy futures at Mizuho Securities (MFG-US), stated that the risk of ground warfare is increasing, and with two of the world’s busiest energy shipping chokepoints facing vessel transit restrictions, oil prices are approaching their four-year high of $126.41. He noted that the global economy is rapidly depleting energy inventories, and if supply disruptions persist, markets could face even greater supply-demand imbalances.

The Houthi movement announced it had launched military operations against two oil tankers carrying Saudi crude and declared a maritime blockade on Saudi oil exports. Saudi Arabia’s official news agency (SPA) later confirmed that one of the tankers caught fire after being attacked while sailing in the Red Sea, though it did not identify the attacker.

Energy consultancy Gelber and Associates highlighted that with shipping through the Strait of Hormuz nearly paralyzed and Iranian crude exports significantly reduced, global short-term crude supply has tightened further, intensifying market concerns over immediate supply capacity.

Analysts estimate that the Strait of Hormuz and Bab el-Mandeb Strait together handle about one-quarter of global crude oil shipments. Any escalation in conflict could therefore have a major impact on global energy markets.

However, shipping data shows that two Chinese supertankers successfully exited the Red Sea via the Bab el-Mandeb Strait after the attacks, carrying approximately 4 million barrels of Saudi crude, indicating that some shipping operations remain functional.

Goldman Sachs (GS-US) recently reported that if disruptions in Strait of Hormuz shipping persist into 2027, Brent crude could exceed $120 per barrel in Q4 2024, with average prices around $100 through 2027. If the Bab el-Mandeb Strait and Suez Canal also face ongoing disruptions, oil prices could rise further.

Meanwhile, Iran’s Revolutionary Guard claimed that an oil tanker exploded and caught fire while attempting to navigate a mine-laden route, with two other tankers turning back. The Guard stated that the Strait of Hormuz is now fully under Iranian control and “completely closed” amid continued U.S. military activity in the region, warning that no oil tankers may enter or exit without coordination with Iran.

U.S. President Trump warned of “major military retaliation” against Iran and its allied Houthi forces.

UBS analyst Giovanni Staunovo noted that Iran’s repeated attacks on vessels transiting the Strait of Hormuz have led to a sharp decline in non-Iranian tanker traffic. Additionally, the U.S. has reimposed a maritime blockade on Iranian ports, reducing Iran’s crude loading volumes from 1.5 to 2 million barrels per day at the start of the month to nearly zero.

He added that crude loadings from the Persian Gulf have dropped to 2.5 million barrels per day over the past seven days—far below the 30-day average of 6 million barrels—indicating a significant slowdown in regional export activity.

In response to tightening supply, three sources revealed that seven core OPEC+ members—Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman—are expected to discuss raising their September production target by approximately 188,000 barrels per day at their August 2 meeting to stabilize global crude supply. However, actual production capacity increases may be limited due to ongoing Middle East conflicts.