Global oil prices surged to a five-month high on Thursday, driven by increased tensions in the Gulf region that raised concerns about potential disruptions to crude oil supplies. Brent crude, the international benchmark, rose by 3% to reach $112 per barrel, its highest level since May 18.
The price increase follows a series of attacks and incidents in the Middle East. Yemen’s Houthi movement launched attacks on targets in Saudi Arabia on Wednesday, resulting in four fatalities and eight injuries, including casualties at a civilian airport in Dammam and an oilfield hit by a drone. Meanwhile, Iran’s Islamic Revolutionary Guard Corps claimed responsibility for striking four vessels in the northern Gulf, accusing them of engaging in illegal oil transfers. Additionally, they reported that three other vessels encountered mines west of the Strait of Hormuz, warning that further provocations might lead to broader retaliatory actions against U.S. regional bases.
These escalating tensions have reignited concerns about the security of the Strait of Hormuz, a critical route for global energy shipments. Previous disruptions in this area had caused oil prices to spike to $126 per barrel in April, although prices later fell amid hopes for a ceasefire. While oil exports from the Persian Gulf have returned to levels above those before the conflict, increased pipeline shipments to the Red Sea and Gulf of Oman have partially mitigated shipping disruptions. However, the renewed attacks have cast uncertainty over the stability of global oil supplies.
The rise in oil prices has also impacted financial markets. Major European and Asian stock indices saw declines on Thursday, amid fears that higher energy costs could exacerbate inflationary pressures and sustain elevated borrowing costs. The economic ramifications extend to the airline industry, with American Airlines’ shares falling after the company cautioned that soaring fuel expenses could lead to a loss this year.