Global oil prices surged to their highest level in five months on Thursday due to escalating tensions in the Gulf region, particularly following attacks in Saudi Arabia and incidents involving vessels near the Strait of Hormuz. Brent crude, the international oil benchmark, rose by 3% to reach $112 per barrel, marking its highest point since May 18.
The price increase is attributed to a series of disruptive events. Yemen’s Houthi movement attacked targets in Saudi Arabia on Wednesday, resulting in the deaths of four people and injuries to eight others. The attacks included a drone strike on an oilfield and an assault at a civilian airport in Dammam. Concurrently, Iran’s Islamic Revolutionary Guard Corps announced that it had targeted four vessels in the northern Gulf, accusing them of participating in illegal oil transfers. Additionally, three other vessels reportedly encountered mines west of the Strait of Hormuz, with Iran cautioning that further provocations might lead to a broader military response.
These developments have reignited concerns about the security of the Strait of Hormuz, a vital corridor for global energy shipments. Previous disruptions in the area had led to significant spikes in oil prices, with crude reaching $126 per barrel in April. Although oil exports from the Persian Gulf have since recovered, bolstered by increased pipeline shipments to the Red Sea and Gulf of Oman, the recent incidents have introduced fresh uncertainty about the stability of global oil supplies.
The rise in oil prices is also exerting pressure on global financial markets. Major stock indices in Europe and Asia saw declines on Thursday, driven by fears that escalating energy costs could exacerbate inflation and maintain high borrowing costs. In the United States, American Airlines shares fell after the company warned that surging fuel prices might result in a financial loss for the year, underscoring the broader economic impact of the oil price hikes.