Oil prices rise sharply when war spreads to new shipping lanes, and that is exactly what happened Thursday. September WTI crude (CLU26) jumped 5.36…
Oil prices rise sharply when war spreads to new shipping lanes, and that is exactly what happened Thursday. September WTI crude (CLU26) jumped 5.36 dollars, or 6.17 percent, while September RBOB gasoline (RBU26) climbed nearly two and a half percent after Houthi forces struck two Saudi Arabian oil tankers in the Red Sea, widening a conflict that had mostly been confined to the Strait of Hormuz. Brent crude, tracked through the September contract (CBU26), broke above 100 dollars a barrel for the first time since May.
Why Oil Prices Rise on Red Sea Escalation
The attack matters because it opens a second front for tanker traffic that had already been rerouting around the Strait of Hormuz. Saudi Arabia has been using its Red Sea export hub at Yanbu to keep crude flowing while the Strait remains too dangerous for many vessels, according to a warning the International Maritime Organization issued the previous Wednesday. If the Houthis follow through on threats to blockade shipping tied to Saudi ports, that workaround narrows considerably. The group has vowed to target vessels calling at Saudi terminals, and shippers are taking the warning seriously given how thin the margin for alternative routes already is.
Layered on top of that is a twelfth straight day of exchanged attacks between the United States and Iran, with Washington maintaining its blockade on Iranian oil shipments through the Persian Gulf. President Trump told Axios on Thursday he is weighing a
