Houthi Attack Sends Oil Prices Soaring to $100 a Barrel
The conflict in the Middle East escalated as Yemen's Iran-backed Houthi rebels attacked two Saudi oil tankers in the Red Sea, sparking a significant increase in oil prices. The attack on the Encelia and Layla tankers has raised concerns about the safety of shipping routes through the region. The price of Brent crude oil surged over 6% to around US$100 a barrel, the highest level since May.
US President Donald Trump threatened 'major military punishment' against the Houthis if their attacks on ships continue. He stated that the US would hold Iran responsible for the actions of its proxy forces. The Houthi rebels have been blockading Saudi-linked shipping through the Bab el-Mandeb Strait, a vital trade route connecting the Red Sea to the Gulf of Aden.
The escalating tensions have led to a scramble for alternative routes as the world economy struggles with the ongoing conflict. Prime Minister Ali al-Zaidi of Iraq met with President Trump earlier this month and has been calling for peace and dialogue in the region. However, an Arab diplomat expressed pessimism about finding an off-ramp from the crisis.