NEW YORK--Oil prices settled above $100 on Thursday for the first time since May after Yemen's Houthis said they attacked two Saudi oil tankers in the Red Sea, causing further global supply disruptions following a near-halt in trade through the Strait of Hormuz.
Brent futures LCOc1 finished up $6.62, or 7%, at $100.69 a barrel, marking their highest close since May 22. The global crude oil benchmark's prices are now nearly 40% higher than when the Iran war began in February, with almost all of its gains coming this month.
U.S. West Texas Intermediate crude CLc1 closed up $5.36, or 6.2%, to settle at $92.19 a barrel, the highest close since June 4.
"With the possibility of a ground war seemingly increasing by the day, and tanker traffic restricted through two of the most active chokepoints in the world, crude oil is suddenly positioning itself to within striking distance of the four-year high of $126.41, with the global economy drawing down so fast it will eventually be running on fumes," said Bob Yawger, director of energy futures at Mizuho.
Yemen's Houthis have opened a new front in the Iran war by targeting vessels carrying Saudi oil in the Bab el-Mandeb Strait after stating they would impose a naval blockade on shipments from Saudi Arabia. The Houthi militia attacked two Saudi Arabian oil tankers in a military operation, the group said on Thursday, with the Saudi Arabian state news agency, SPA, later confirming that one of the two vessels was ablaze after an assault while sailing in the Red Sea. SPA did not say who attacked the vessel.
"The escalation compounds the near-halt in Hormuz traffic and the sharp reduction in Iranian exports, intensifying concerns over near-term global availability," Gelber and Associates wrote in a note.
