Brent crude sails past $100 as Middle East war intensifies
The Iran war escalated this week as Yemen’s Iran-backed Houthi rebels attacked four southern Saudi Arabian cities and oil facilities.
Brent crude, the international benchmark oil price, climbed above $100 a barrel on Wednesday for the first time since July as an uptick in attacks across the Middle East fueled concerns about supply shortages.
What happened: Brent crude peaked at $100.98 earlier on Wednesday before easing to $100.77 at 9:58 a.m. EDT.
The Iran war escalated this week when Yemen’s Iran-backed Houthi rebels attacked four southern Saudi cities and oil facilities on Tuesday. The Houthis, who control most of Yemen’s populated areas, including the capital, Sanaa, said they targeted Khamis Mushait and sites belonging to Saudi Aramco in Abha, Najran and Jizan. The attacks wounded more than 70 people and set oil installations on fire.
The Houthis said on the group's television channel Almasirah on Wednesday that Saudi Arabia carried out more than 40 airstrikes in several regions of Yemen, including the provinces Al-Jawf, Marib, Taiz and Hodeidah.
There were also attacks on crude shipments in the Red Sea, a key route for oil transported through the Suez Canal and an increasingly important outlet for supplies seeking to avoid the Strait of Hormuz, where maritime traffic has been choked since the Iran conflict began on Feb. 28.
US Central Command said on Tuesday it had “destroyed” several Iranian tankers after Iran’s Islamic Revolutionary Guard Corps attempted to strike a US Navy warship with ballistic missiles.
US forces struck the tankers in the Gulf of Oman and near Iran’s Kharg Island, CENTCOM said in a statement, adding that American forces “directed the crews to abandon ship before the vessels were struck."
The IRGC said that in retaliation, its forces struck a US military base in Jordan. Jordan’s state news agency reported Wednesday that air-defense systems destroyed 18 of the 20 ballistic missiles originating from Iranian territory in an overnight attack, adding that two missiles fell in unpopulated areas and there were no casualties.
The IRGC also said it attacked two US vessels and eight oil tankers in the Gulf after warning the crews of the ships near ports in Bahrain and Kuwait to leave their vessels immediately.
A tanker carrying about 2 million barrels of Iraqi fuel oil was struck by a drone in Iraqi waters on Wednesday. A fire broke out aboard the Panama-flagged oil tanker New Andros after it was hit at around 6 a.m. local time on Wednesday, two Iraqi port officials told Reuters.
Separately, the British navy-affiliated UKMTO reported that several merchant vessels in the Gulf had been hit by disabling fire overnight.
Why it matters: The attacks by the Houthis on Saudi Arabian cities have opened a new front in the more than six-month-old conflict. After a relatively calm August, Iran and the US have stepped up attacks and exchanges of fire in the region, including in the Strait of Hormuz.
Hormuz is crucial to energy markets and before the war, it saw a fifth of all oil and liquefied natural gas shipments pass through it.
The Red Sea, a key maritime shipping route from the Middle East, has also experienced several attacks on oil tankers, adding to the market uncertainty about crude supplies and renewing concerns about energy inflation.
Brent was trading at around $70 a barrel before the war but climbed to nearly $115 in early May.
Know more: Only six commodity vessels transited the Strait of Hormuz on Tuesday, compared to nine on Monday, according to maritime analytics firm Kpler, as traffic remained at a near standstill. Before the war, between 130 and 140 ships transited the waterway daily.
Meanwhile, 25 commodity-carrying vessels transited the Bab al-Mandab Strait — the southern gateway to the Red Sea, where most of the Houthi attacks are happening — on Tuesday, with 11 ships entering and 14 exiting the waterway.
