Brent Prices Spike on Houthi Missile Strike, Retreat as Iran Floats Hormuz Reopening Framework

The price of Brent crude oil surged to $108.23 on Thursday after six ballistic missiles were fired at Saudi Arabia's oil port of Yanbu and the inland city of Taif, but quickly retreated as news broke that Iran had floated a framework for reopening the Strait of Hormuz within seven days.

The missiles, launched from Yemeni territory held by Houthi rebels, were intercepted by Saudi air defenses, but the incident sparked fears of a wider escalation in the conflict between Saudi-led coalition forces and Iranian-backed Houthi fighters.

The proposed framework, floated at the United Nations General Assembly in New York, would see Iran's naval blockade lifted around its ports if the US removes its own naval blockade of Iranian ports, alongside a sixty-day ceasefire in the region. The proposal does not address uranium enrichment or comprehensive sanctions relief, but rather focuses on operational concessions.

The market reaction to the news was swift, with Brent crude prices falling by $3.38 to near $104.85 by the New York close as traders reassessed the likelihood of a diplomatic resolution to the conflict.