US-Iran Conflict and Houthi Advance Send Oil Prices Soaring Above $108

Oil prices surged to their highest levels since May as the widening US-Iran conflict and Houthi advance in Yemen raised fears of a prolonged disruption to global crude supplies.

The Strait of Hormuz, the world's most important oil chokepoint, has already seen severe disruptions due to the US-Iran conflict. The Bab al-Mandeb Strait, which links the Red Sea with the Gulf of Aden and is a critical route for energy shipments between the Middle East and Europe, is also under threat.

The Houthi forces have seized Yemen's strategic Red Sea port of Mocha and advanced towards the Bab al-Mandeb Strait. The group has also intensified attacks on Saudi Arabia, with their latest advance coming after attacks on Saudi territory and a declaration of a blockade targeting Saudi shipping.

OPEC expects global oil demand growth to accelerate dramatically in 2027, but any prolonged supply disruption could have a much bigger impact on prices if global consumption begins accelerating at the same time.