- Oil prices surged after Saudi Arabia reported an attack on energy assets, with Brent touching $99 per barrel and U.S. crude rising by more than 2.5% to nearly $94 per barrel.
- Saudi Arabia condemned the Houthis’ attacks on commercial vessels in the Red Sea and their “threats to freedom of international maritime navigation.”
- The escalation followed U.S. strikes on three Iranian oil tankers after Iran launched ballistic missiles toward U.S. Navy ships.
- Renewed hostilities have reduced traffic in the Strait of Hormuz to just four ships on Saturday and six on Sunday, compared to its pre-war role of carrying more than 20% of the world’s energy supply.
- Vessel traffic in the Bab el Mandeb strait fell 16% from the prior week, though overall traffic of more than 260 ships remained higher than in the Strait of Hormuz.
- Since the war started, Brent has risen 36% and the national average gas price has risen 40%; since the start of the year, Brent is up more than 62%.
- Analysts at Goldman Sachs and HSBC warned of significant upside risk, forecasting that Brent could exceed $120 if Persian Gulf oil flows remain low, while HSBC’s base case is for Brent to hover around $95 through year-end.
Oil prices have surged significantly, with Brent nearing $100 per barrel after Saudi Arabia reported attacks on its energy infrastructure by the Houthi rebels, which resulted in 73 civilian injuries.121011
The state-run Saudi Press Agency labeled the Houthis as "terrorists" and condemned their actions, which also included strikes on commercial vessels in the Red Sea, threatening international maritime navigation.3
In response to the escalating tensions, U.S. crude oil prices rose by more than 2.5% to nearly $94 per barrel. The renewed hostilities follow a U.S. strike on Iranian oil tankers after Iran launched ballistic missiles toward U.S. Navy ships.45
The situation has led to a significant reduction in vessel traffic through the Strait of Hormuz, a critical passage for global oil supply, with only four ships passing through on Saturday and six on Sunday. Before the conflict, this strait carried over 20% of the world’s energy supply.67
Since the onset of the war, Brent crude has increased by 36%, while the national average gas price in the U.S. has risen by 40%. Analysts from Goldman Sachs predict that if oil flows from the Persian Gulf remain low, Brent could exceed $120 per barrel. HSBC analysts expect prices to hover around $95 through the end of the year.121314
“Brent touched $99 per barrel and U.S. crude rose 2.5% to nearly $94, while Strait of Hormuz traffic fell to just four ships Saturday. Analysts at Goldman Sachs and HSBC warn Brent could exceed $120 if Persian Gulf flows remain low.”
