Middle East Tensions Drive Oil Prices Above $90 a Barrel
Oil prices surged on July 29 as tensions in the Middle East escalated. Brent crude oil futures rose 7.4% to $90.35 a barrel, while U.S. West Texas Intermediate futures gained 7.4% to $85.11.
The increase came after Iranian missiles aimed at U.S. bases in Jordan and the United States were intercepted, prompting Saudi Arabia to strike back against Iran-backed targets in Iraq.
Iran is also trying to control maritime traffic through the Strait of Hormuz, a crucial chokepoint for oil exports. The country has repeatedly attacked oil tankers transiting the strait, while its Houthi allies in Yemen have declared a maritime embargo against Saudi Arabia and attacked two Saudi oil tankers in the Red Sea.
However, Chinese ships are being allowed to exit the Bab el-Mandeb Strait without incident. The Houthis have stated that they will impose fees on commercial ships sailing through the southern Red Sea, but Chinese tankers will be exempt from this fee.