Oil Prices Plummet as Red Sea Disruptions Continue

Oil prices plummeted on Friday, erasing nearly half of Thursday's 6% surge, as shipments continue in the Red Sea despite threats from the Houthis. The Iran-backed group launched a missile and drone attack on two Saudi Arabian oil tankers in the region, expanding disruptions beyond the Strait of Hormuz and threatening oil shipments. President Trump said he is considering a 'massive attack' that would be 'bigger than ever before', but no decision has been made yet.

The Houthis have vowed to blockade shipping linked to Saudi Arabia, warning shipowners against calling at the nation's ports. This move threatens Saudi oil exports from Yanbu, a Red Sea hub used since the war brought shipping through the Strait of Hormuz to a near halt. Meanwhile, US and Iran exchanged attacks for the 13th straight day.

Russian crude production fell to 8.928 million bpd in June, its lowest level in over two years, while Russian oil exports rose to 4.13 million bpd through June 28, their highest since Russia invaded Ukraine in 2022. OPEC aims to continue a series of oil quota increases, with the cartel planning to raise output targets further and revive the final portion by the end of September.