Global oil prices have reached a five-month high due to escalating tensions in the Gulf region, sparking concerns over potential disruptions to crude oil supplies. Brent crude, the international benchmark, surged by 3% to $112 per barrel following recent attacks in Saudi Arabia and incidents involving vessels near the strategically crucial Strait of Hormuz.
The rise in prices comes in the wake of attacks carried out by Yemen’s Houthi movement on Saudi targets, resulting in four deaths and eight injuries, including casualties at a civilian airport in Dammam and an oilfield targeted by a drone. Concurrently, Iran’s Islamic Revolutionary Guard Corps reported strikes on four vessels in the northern Gulf, accusing them of illegal oil transfers. They also noted that three vessels encountered mines west of the Strait of Hormuz, issuing a warning that further provocations could lead to broader actions against US bases in the region.
These incidents have reignited fears over the security of the Strait of Hormuz, a vital channel for global energy shipments. Previous disruptions in this key maritime route had driven oil prices to $126 per barrel in April, although hopes for a ceasefire had since led to a decline. Despite oil exports from the Persian Gulf recovering above pre-conflict levels, increased pipeline shipments to the Red Sea and Gulf of Oman have only partially mitigated shipping disruptions.
The heightened oil prices are affecting financial markets worldwide, with major European and Asian stock indices experiencing declines on Thursday amid worries that rising energy costs could exacerbate inflation and keep borrowing costs high. In the United States, American Airlines shares fell after the company cautioned that exceptionally high fuel expenses might result in a financial loss this year, underscoring the broader economic impact of rising oil prices.