Global oil prices surged to their highest level in five months on Thursday, driven by mounting concerns over supply disruptions following a series of attacks in Saudi Arabia and incidents involving vessels near the Strait of Hormuz. Brent crude, the international benchmark, climbed 3% to reach $112 per barrel, a peak not seen since mid-May.
The escalation in tensions was primarily due to attacks carried out by Yemen’s Houthi movement on Saudi Arabian targets on Wednesday, resulting in the deaths of four people and injuring eight more. Among the affected sites were a civilian airport in Dammam and an oilfield that was targeted by a drone.
Compounding these fears, Iran’s Islamic Revolutionary Guard Corps reported striking four vessels in the northern Gulf, accusing them of participating in illegal oil transfers. Additionally, three other vessels reportedly encountered mines west of the Strait of Hormuz. The Iranian military warned that further provocations could lead to a broader response against U.S. regional bases.
The heightened tensions have renewed concerns over the security of the Strait of Hormuz, a critical artery for global energy shipping. Earlier disruptions in this region had previously driven oil prices to a high of $126 per barrel in April, though prices later fell amid hopes for de-escalation.
Despite a recovery in oil exports from the Persian Gulf to levels above those seen before the conflicts, increased pipeline shipments to the Red Sea and Gulf of Oman have somewhat mitigated shipping disruptions. Nonetheless, the recent attacks have cast doubt on the stability of global supplies.
The spike in oil prices is also weighing on financial markets, with major European and Asian stock indices declining on Thursday. There are growing concerns that rising energy costs could exacerbate inflation and sustain higher borrowing costs. American Airlines shares fell as the company warned that soaring fuel expenses might push it into a loss this year, highlighting the broader economic impact of escalating oil prices.