Oil prices jump over $96 amid Iran and Houthi threats

Oil prices climbed more than 1.5% in Asian markets on Thursday, reaching their highest level in six weeks. Brent crude futures rose to $96.27 a barrel, the highest since June 8, while U.S. West Texas Intermediate crude reached $88.48. The surge is linked to escalating risks in Middle East maritime transport. Iran's Revolutionary Guard announced that a tanker caught fire after an explosion while navigating a "mined" route south of the Strait of Hormuz. The Guard also stated the strait is under their control and "completely closed" during U.S. operations, warning that no ships would be allowed to enter or exit without Iranian consent. The Houthis, meanwhile, opened a new front by threatening ships carrying Saudi oil in the Bab el-Mandeb strait and announcing a naval blockade of Saudi Arabia. Houthi forces claimed a military operation against two Saudi tankers, with maritime security reports indicating one, the Encelia, was hit in the Red Sea. Approximately ten ships reportedly changed course after warnings not to approach Saudi ports, though Reuters could not immediately confirm these details. Market analyst Priyanka Sachdeva of Phillip Nova noted that oil prices face a rare risk of simultaneous disruptions in both the Bab el-Mandeb and Strait of Hormuz. "Geopolitical factors have returned, but a sustained price rise will require evidence of long-term shipping disruptions or significant supply shortages," she said. Energy research head Saul Kavonic of MST Marquee warned that the new threat to shipping in the Red Sea could disrupt up to 5 million barrels of oil per day, a quantity that represents a significant portion of global supply. The disruptions threaten the global energy supply chain beyond the Persian Gulf.

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Geopolitical factors have returned, but a sustained price rise will require evidence of long-term shipping disruptions or significant supply shortages.