Brent crude oil prices surged to a six-week peak near $96 on Thursday following missile and drone strikes by Iran-backed Houthi forces on two Saudi tankers in the Red Sea. This attack introduces a new chokepoint for global oil supplies in addition to the well-known Strait of Hormuz.
The benchmark climbed 1.8% to $95.70, marking its fifth day of gains and pushing weekly gains beyond 10%. Last week alone saw a 17.35% rise, driving Brent close to the $100 resistance, a key Fibonacci and psychological barrier.
Supply Risks Multiply with Red Sea Blockade
The Houthis declared a maritime embargo targeting Saudi-linked vessels, causing at least three crude carriers destined for Asia to reverse course. The strategic Bab el-Mandeb Strait, controlled by the Houthis, handles about 5.4 million barrels daily. A blockade here would force tankers on lengthy, costly detours around southern Africa, inflating freight and insurance expenses.
Saudi Aramco has adapted by rerouting shipments through Egypt's Mediterranean terminal at Sidi Kerir, avoiding the dangerous passage near Yemen. This move highlights the immediate logistical challenges triggered by the attacks.
Meanwhile, US military operations against Iranian targets continue, with President Trump warning of retaliatory strikes if Iranian forces threaten shipping in the Strait of Hormuz. Iran has responded by threatening to target US-linked energy infrastructure, dampening hopes for a ceasefire.
Beyond the Middle East, supply issues spread as the Caspian Pipeline Consortium stopped intake from Kazakhstan after drone attacks near its Black Sea terminal. In contrast, US crude inventories surprised markets with a 1.4 million barrel build, offering the only bearish signal amid rising prices.
The weekly Brent chart confirms a bullish breakout above the $92 resistance, previously a ceiling since 2023. After a sharp correction to $72 earlier this month, prices regained momentum, signaling that oil markets are bracing for continued volatility.
