Global oil prices broke back above $100 a barrel on Thursday for the first time in two months, surging from $95 the previous day as dual disruptions in the Red Sea and the Strait of Hormuz reignite fears of a severe global energy supply shock. The sharp rise reflects market alarm following Houthi missile and drone strikes on two Saudi oil tankers, the Encelia and Layla, in the Bab al-Mandeb strait, opening a second maritime shipping crisis alongside ongoing U.S.-Iran fighting in the Persian Gulf.
The simultaneous threats to the Middle East’s primary trade arteries have renewed warnings from analysts that crude could climb back toward $120 a barrel, threatening renewed inflationary pressures for households and global economies.
Equity markets slid on both sides of the Atlantic in response, with Wall Street’s tech-heavy Nasdaq dropping over 2% and government bond yields rising as investors weighed the economic fallout of prolonged regional instability.
Oil prices previously peaked at $126 a barrel in April following initial U.S.-Israeli strikes on Iran before falling to $71 in early July amid hopes for a ceasefire. However, prices have rapidly surged back toward triple digits after a tentative diplomatic memorandum of understanding collapsed, triggering renewed military strikes and expanded maritime blockades across the region.
