The escalation, compounded by Houthi-led attacks on Saudi oil tankers in the Red Sea, has ignited concerns over global energy supply disruptions and shipping chokepoints.
Brent Crude Tops $95
Market Volatility and Price Trends
The global energy market is experiencing significant price volatility as geopolitical tensions in the Middle East intensify. On Thursday, Brent crude futures rose $1.93, or 2%, to $96 a barrel, marking their highest level since June 8. The benchmark had ended the previous session more than $3 higher at $94.07. Meanwhile, U.S. West Texas Intermediate (WTI) crude gained $1.44, or 1.7%, to trade at $88.27 per barrel, following an advance of nearly 3% on Wednesday. Early Asian trading on Thursday saw WTI crude at $88.05 per barrel, up 1.41% on the session, while Brent crude had gained 1.76% to trade at $95.73 per barrel.
The price rally follows reports that an interim deal signed last month, which was intended to end the fighting, has crumbled. As the conflict intensifies, both sides have targeted civilian infrastructure. The escalation has pushed oil prices higher in recent weeks, with benchmark Brent crude trading above US$88 a barrel earlier in the week, keeping pressure on Americans’ wallets ahead of midterm elections.
U.S. Military Strikes Against Iranian Targets
Military Escalation and the Strait of Hormuz
The current price rally follows the 12th consecutive night of U.S. military strikes against Iranian targets. According to U.S. Central Command (CENTCOM), American forces began this fresh round of strikes at 5:30 p.m. ET on Wednesday under orders from President Trump, with the stated target of degrading Iran’s ability to threaten commercial shipping and civilian mariners operating in regional waters. The U.S. military previously carried out a 10th consecutive night of strikes in a push to reopen the Strait of Hormuz, a campaign that followed the death of an American service member and Iranian attacks on U.S. allies Jordan, Kuwait, and Bahrain, where the U.S. Navy’s 5th Fleet is based.
The situation in the Strait of Hormuz remains precarious. Iran’s Revolutionary Guards claimed an oil tanker caught fire after attempting to transit a mined shipping route south of the Strait. Two additional tankers reportedly turned back, with Iranian officials declaring that the waterway was under their control and warning that vessels would not be permitted to transit without coordination with Tehran. An Iranian Revolutionary Guards spokesperson warned shipping companies in a post on X that the southern route through the Strait of Hormuz had been mined, and the group stated the strait would remain completely closed
as long as U.S. military action continued.
Houthi Militants Claim Responsibility
Red Sea Blockade and Houthi Involvement
The conflict has expanded to the Red Sea, an alternative route for Saudi oil exports. Iran-backed Houthi militants have claimed responsibility for attacks on two Saudi tankers, the Encelia and the Layla, accusing the vessels of violating a blockade. The UK Maritime Trade Operations (UKMTO) reported that a ship had been struck by a projectile off Saudi Arabia’s Red Sea coast near Al Shuqaiq, triggering a fire on board. According to Iranian state media, the Houthis now claim to have forced at least nine ships to turn back from the Bab el-Mandeb Strait after announcing a naval blockade of Saudi Arabia. This Houthi threat to Saudi shipments through the Red Sea raises the risk of wider disruption to global energy supplies beyond the Gulf.
Goldman Sachs Has Warned
Diplomatic Outlook and Market Impact
Even as the U.S. and Iran move closer to conflict, some diplomatic efforts have emerged, with Iran’s interior minister traveling to Pakistan for talks. However, shipping through the Strait of Hormuz—a vital supply route for world energy—has largely stalled. As the market digests these events, the combination of the 12th night of strikes and the expansion of the conflict into the Red Sea continues to drive the current rally.
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