Oil prices extended their rally on Wednesday after Iran-backed Houthi militants claimed responsibility for attacks on two Saudi Arabian oil tankers in the Red Sea, escalating tensions in the Middle East and raising fresh concerns over global crude supplies.
Brent crude climbed as much as 1.4% to trade above $95 a barrel, after closing at a six-week high in the previous session, while West Texas Intermediate (WTI) hovered near $88 a barrel.
The Houthis said they had targeted the tankers Encelia and Layla with missiles and drones, accusing the vessels of violating a blockade. Shortly before the group's statement, the UK Maritime Trade Operations (UKMTO) reported that a ship had been struck by a projectile off Saudi Arabia's Red Sea coast near Al Shuqaiq, triggering a fire on board, although it did not identify the vessel.
The attacks mark the first direct strikes on oil tankers in the Red Sea, opening a new front in a conflict that has already disrupted shipping through the Strait of Hormuz, one of the world's most critical oil transit chokepoints. The Red Sea has become an increasingly important alternative export route for Saudi Arabia, allowing the kingdom to bypass Hormuz and ship millions of barrels of crude to global markets.
The latest escalation adds to mounting geopolitical risks that have already driven a sharp rally in crude prices. Brent has surged nearly 30% this month, with some analysts warning that prices could return to triple-digit levels later this year if hostilities persist and supply disruptions worsen.
The geopolitical backdrop remains tense. US forces reportedly carried out a 12th consecutive day of strikes on Iran, while Tehran responded by attacking Kuwait. At the same time, both Washington and Tehran have played down the likelihood of imminent peace talks, suggesting the conflict could become more prolonged.
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