Oil tops $100 again after Houthi attack on Saudi tankers worsens oil supply disruption
By Siddharth Cavale
NEW YORK, July 23 (Reuters) – Oil prices rose above $100 on Thursday, reaching the highest level in nearly two months, after Yemeni Houthis said they attacked two Saudi oil tankers in the Red Sea.
Brent futures rose $6.64, or 7%, to $100.71 a barrel by 10:52 a.m. ET (1452 GMT), surpassing $100 for the first time since late May. The global benchmark for crude oil has risen nearly 40% this month and was in technical overbought territory for the ninth consecutive day for the first time since September 2023.
U.S. West Texas Intermediate crude rose $5.18, or 6%, to $92.01 a barrel, trading above $90 for the first time since June 11. Both contracts were higher for the fifth consecutive day.
“The (Saudi tankers’) attack pushed world crude oil prices higher and into a higher gear as another bottleneck in crude oil trade from the Middle East tightened trade,” said Tim Snyder, chief economist at Matador Economics.
SAUDI TANKERS WERE ATTACKED
After announcing that they would impose a naval blockade on shipments from Saudi Arabia, Yemeni Houthis opened a new front in the war against Iran by targeting ships carrying Saudi oil in the Bab al-Mandeb Strait. Houthi militia attacked two Saudi Arabian oil tankers in a military operation, according to the group’s statement on Thursday. The Saudi news agency later confirmed that one of the two ships caught fire after the attack while sailing in the Red Sea.
Goldman Sachs said that if the Strait of Hormuz is interrupted by 2027, Brent may exceed $120 per barrel in the fourth quarter and an average of $100 next year, and that there may be a further increase if the Bab el-Mandeb Strait and the Suez Canal are permanently interrupted.
Iran’s Revolutionary Guard said that an oil tanker trying to follow the mined route in the southern part of the Strait of Hormuz, close to the coast of Oman, caught fire after the explosion, and two other tankers turned back. The Guards said that the strait was under their control and “completely closed” while US actions in the region continued, and warned that no tankers would be allowed to enter or leave without coordination with Iran.
Iran’s attacks on ships passing the Strait of Hormuz have resulted in a decrease in the number of non-Iranian oil tankers passing through the waterway. UBS analyst Giovanni Staunovo also said the reimposition of the US naval blockade targeting Iranian ports would result in Iranian oil shipments falling to zero, from 1.5 million barrels per day at the beginning of the month to 2 million barrels per day.
