Brent crude tops $100 as Houthi attack on Saudi tankers sends oil prices surging 7%

A geopolitical crisis spreading from the Strait of Hormuz to the Red Sea sent global oil prices sharply higher, pushing Brent crude back above $100 a barrel for the first time in roughly two months and deepening market fears over disruptions to Middle Eastern oil supply chains.

September Brent crude futures settled at $100.69 a barrel Thursday (local time) on the ICE Futures Exchange, up 7.04 percent from the previous session. It was the first time Brent had closed above $100 since May 22.

West Texas Intermediate for September delivery also rose 6.17 percent to settle at $92.19 a barrel on the New York Mercantile Exchange. Both benchmarks posted gains for a fifth consecutive trading session, with Brent reaching its highest level since May 22 and WTI its highest since June 4.

The immediate trigger was a Houthi attack on Saudi oil tankers in the Red Sea.

Yemen's Iran-backed Houthi rebels said Thursday they had struck two Saudi oil tankers transiting the Bab el-Mandeb Strait, a strategic chokepoint at the entrance to the Red Sea. The Houthis had already declared a maritime blockade of the waterway, and the follow-through on that threat is turning fears of shipping disruptions into reality.

Markets grew more unsettled after President Donald Trump raised the possibility of large-scale military action targeting not only the Houthis but also Iran.

"We are right on the verge of making a decision," Trump said in a media interview. "Everything is ready."

Markets are already contending with a near-total halt to traffic through the Strait of Hormuz following armed conflict between the United States and Iran. Analysts warn that a simultaneous blockade of the Bab el-Mandeb Strait could deliver a severe blow to global oil supply chains.

The Strait of Hormuz is the principal export corridor for crude from Persian Gulf producers, while the Bab el-Mandeb links the Red Sea to the Suez Canal. Together, the two straits form the main shipping lanes for Middle Eastern crude and LNG bound for Europe and Asia, and market estimates put the volume of oil passing through them at roughly 25 percent of global supply.

Goldman Sachs said Brent crude could exceed $120 a barrel in the fourth quarter of this year if disruptions at the Bab el-Mandeb Strait persist, and forecast that the average price next year could hold around $100 a barrel.

The investment bank warned that prices could rise even further than current projections if both the Bab el-Mandeb Strait and the Suez Canal face disruptions at the same time.