Oil Prices Hit Six-Week High as US-Iran Tensions and Houthis Attacks Escalate
Escalating Geopolitical Tensions Drive Oil Price Surge
By Arathy Somasekhar
Oil Price Movements and Market Reaction
July 23 (Reuters) - Oil prices rose more than 1.5% to their highest in more than six weeks on Thursday, with the United States launching a new round of strikes on Iran and Yemen's Houthis targeting oil tankers in the Red Sea.
Brent crude futures rose $1.93, or 2% to $96 by 0011 GMT, the highest since June 8. It had settled over $3 higher at $94.07 in the previous session, just shy of a six-week high.
U.S. West Texas Intermediate crude rose $1.44, or 1.7%, to $88.27 after rising nearly 3% on Wednesday.
US-Iran Conflict Intensifies
US Military Actions and Iranian Response
The U.S. military said it carried out a 12th consecutive night of attacks on Iran hours after U.S. President Donald Trump's vowed to destroy an Iranian bridge or power plant every time Iran shoots at a ship in the Strait of Hormuz, raising the stakes in the war with Iran.
Strait of Hormuz Under Threat
Iran's Revolutionary Guards said that an oil tanker had caught fire after an explosion while attempting to pass through what they described as a mined route south of the Strait of Hormuz, and that the two other tankers had turned back.
The Guards said the strait was under their control and "completely closed" while U.S. actions continued in the region, warning that no tanker would be allowed to enter or leave without coordination with Iran.
Houthis Escalate Attacks in the Red Sea
Naval Blockade and Targeted Attacks
As well as the renewed conflict over control of that key waterway, the Iran-aligned Houthis have opened a new front in the war by threatening to target vessels carrying Saudi oil in the Bab el-Mandeb Strait and announced a naval blockade of Saudi Arabia.
The Houthis said they had carried out a military operation targeting two Saudi oil tankers, and maritime security reports said one of the vessels named by the group, the Saudi-flagged tanker Encelia, had been hit in the Red Sea.
Impact on Global Shipping and Energy Supplies
The Houthis said they had forced around 10 ships to retreat and return after warning vessels against sailing to Saudi ports. Reuters could not immediately verify this account.
The Houthis' naval blockade on Saudi Arabia in the Red Sea threatens to disrupt global energy supplies beyond the Gulf, while Iran's Revolutionary Guards' spokesperson also warned shipping companies that the Strait of Hormuz southern route is mined in a post on X.
US Oil Supply and Market Data
On the U.S. supply side, crude stocks rose by 2 million barrels last week, the Energy Information Administration said, as refinery runs eased and crude exports dropped while imports rose. Analysts' in a Reuters poll had estimated a 1.1 million-barrel draw. [EIA/S]
(Reporting by Arathy Somasekhar; Editing by Kim Coghill)
