Oil Prices Surge on Middle East Tensions Amid Houthi Blockade Threat
Oil prices surged to a five-week high on Tuesday due to concerns about supply disruptions in the Middle East following attacks between the US and Iran, as well as a threatened naval blockade by Yemen's Houthis.
The Brent futures rose $1.79, or 2%, to settle at $91.01 a barrel, while US West Texas Intermediate crude gained $1.68, or 2%, to settle at $84.91. This marked the highest close for Brent since June 10 and for WTI since June 11.
Analysts pointed out that the rally is not necessarily about lost barrels today but rather the market assigning a higher probability of logistics remaining unstable through the week, especially if Saudi exports to Asia or Red Sea transit face additional disruption. The Houthis announced a naval blockade on Saudi Arabia on Monday, expanding the conflict and raising the threat to global energy supplies and trade beyond the Gulf.
Two oil tankers carrying Saudi crude to Asia reversed course in the Red Sea after threats from the Iran-aligned Houthis. The US bombed targets in the south and west of Iran overnight, with Tehran targeting US sites in Bahrain, Kuwait, and Jordan, and at least one tanker was hit in the Strait of Hormuz.