Oil Prices Surge as Red Sea and Hormuz Risks Mount

Oil prices rose more than 1.5% in Asian trading on Thursday, reaching their highest level in more than six weeks as Yemen’s Houthi rebels targeted oil tankers in the Red Sea and the United States launched a fresh round of strikes on Iran.

Brent crude futures climbed $2.20, or 2.3%, to $96.27 a barrel by 5:27 a.m., their highest level since June 8. The benchmark had already gained nearly $3 in the previous session, closing at $94.07, just below a six-week high.

U.S. West Texas Intermediate crude rose $1.65, or 1.9%, to $88.48 a barrel, following a 3% jump on Wednesday, Reuters reported.

Iran’s Islamic Revolutionary Guard Corps said a tanker caught fire after an explosion while attempting to navigate what it described as a mined route in the southern part of the Strait of Hormuz. Two other vessels reportedly turned back.

In a statement, the IRGC said it controlled the strategic waterway and that it was “completely closed” while U.S. military operations continued in the region. It warned that no tanker would be allowed to enter or leave without coordination with Iran.

The renewed confrontation over the critical shipping route comes as the Iran-aligned Houthis threaten to target vessels carrying Saudi oil through the Bab el-Mandeb Strait, announcing what they described as a naval blockade of Saudi Arabia.

Oil markets now face the rare prospect of simultaneous disruptions at both the Bab el-Mandeb and the Strait of Hormuz, said Priyanka Sachdeva, senior market analyst at Phillip Nova, according to Reuters.

“Geopolitical premiums have returned, but a sustained price rally will require evidence of prolonged shipping disruptions or significant supply outages,” she said.

The Houthi threat to Saudi shipping in the Red Sea could disrupt global energy flows beyond the Gulf. An IRGC spokesman also warned shipping companies on X that the southern route through the Strait of Hormuz had been mined.

The renewed threat to Red Sea shipping could put up to 5 million barrels of oil a day at risk and disrupt a key route used to transport Gulf crude while bypassing the Strait of Hormuz, said Saul Kavonic, head of energy research at MST Marquee.

Meanwhile, the U.S. military said it had completed its 12th consecutive night of strikes on Iran, hours after President Donald Trump vowed to destroy an Iranian bridge or power plant each time Iran attacks a vessel in the Strait of Hormuz, further raising the stakes in the conflict.