Oil prices hit $100 (€87.95) a barrel on Thursday for the first time since May, after attacks by Iranian-backed Houthi militants in the Red Sea threatened to squeeze global supplies further and reignite a global inflation shock.
Brent crude, the international benchmark, rose 6.6 per cent to $100.28, extending a blistering rebound this month amid fears that the US and Iran are headed for a return to full-blown conflict.
Oil’s rally accelerated after the Houthis said they had attacked two Saudi Arabian tankers in the Red Sea following their move to impose a maritime blockade on the kingdom this week.
“This is the perfect hurricane for the market,” said Arne Rasmussen, chief analyst at Global Risk Management. “You have an escalation in the rhetoric from both sides [in the Iran war] and now the Red Sea attacks. The market was probably caught on the short side. Everything is moving in the wrong direction.”
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The targeting of the Saudi ships raises the spectre of the Houthis closing the Bab al-Mandab Strait, which connects the Red Sea with the Gulf of Aden and the Indian Ocean.
It has become a vital route for Saudi Arabia’s oil exports since Iran seized control of the Strait of Hormuz in the early days of the war. The attacks also risk unravelling a four-year ceasefire between the Houthis and Saudi Arabia.
[ Oil tankers reverse course as Yemen’s Houthis open new front in US-Iran warOpens in new window ]
Brent crude last traded at $100 on May 26th but tumbled in June after Washington and Tehran’s agreement to extend their ceasefire and reopen the strait raised hopes that oil supplies through the waterway would be swiftly restored.
Oil’s latest surge will revive the pressure on central banks to respond to inflation pressures by lifting interest rates. The European Central Bank warned on Thursday that “the full inflationary impact of the energy shock has yet to play out” as it kept borrowing costs on hold.
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Rising US petrol prices — which topped $4 a gallon earlier this week — are also likely to fuel voter frustration with US President Donald Trump ahead of November’s midterm elections.
The intervention from the Houthis comes following the breakdown of the ceasefire, with the US and Iranian forces trading fire for almost two weeks.
Trump on Thursday warned the Houthis and Iran that they would face “major military punishment” if the attacks continued.
The Houthis are one of the most potent members of Iran’s so-called axis of resistance. But they have largely stayed out of the conflict, apart from firing several barrages of missiles and drones at Israel in March and early April.
There have been concerns, however, that the Houthis will co-ordinate with Tehran to close Bab al-Mandab to pile pressure on energy markets and global trade.
Given the latest attacks, oil prices could exceed the high of $139 a barrel reached in 2022 in response to Russia’s invasion of Ukraine or even the $146 peak of 2008, said Helima Croft, head of global commodity strategy at RBC Capital Markets. - Copyright The Financial Times Limited 2026
