Brent Crude Surpasses $100 as Trump Threatens Iran Over Red Sea Tanker Attacks

Global oil prices surged, with Brent crude rising above $100 a barrel for the first time since May, after Yemen's Houthi fighters attacked two Saudi oil tankers in the Red Sea. The escalation prompted U.S. President Donald Trump to threaten "major military punishment" against Iran and its Houthi allies, intensifying fears of a wider conflict impacting a second critical energy shipping lane.

Red Sea Tensions Escalate

The Houthi group, which controls northern and western Yemen, claimed responsibility for missile and drone strikes on the Saudi oil tankers, the Encelia and the Layla. A maritime security source confirmed to Reuters that the Encelia sent a distress call after being struck near the Saudi port of Jizan. The attacks are part of a newly declared Houthi naval blockade on Saudi Arabia, a move to counter Riyadh's use of Red Sea pipelines to bypass the Iranian-controlled Strait of Hormuz.

In a statement on social media, President Trump said the U.S. would hold Iran responsible for any further attacks. "The Houthis are a Surrogate and/or Proxy of Iran, and major military punishment will be inflicted upon Iran and, of course, the Houthis, themselves," Trump wrote. He later told Axios that Iran hasn't "received enough pain yet" and that he was considering relaunching major combat operations.

Market Impact and Chokepoint Fears

Fears of a significant supply disruption sent a shockwave through energy markets. The international benchmark Brent crude jumped more than 6%, piercing the psychologically important $100 per barrel level. The attacks raise the risk of closing the Bab el-Mandeb strait, which connects the Red Sea to the Indian Ocean and is the second most important chokepoint for global energy shipments after the Strait of Hormuz.

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Market participants are also pricing in higher operational risks. Shipping insurance costs for passage through the southern Red Sea doubled for some firms on Thursday, according to industry sources. Shiptracking data showed several tankers have already altered their course to avoid the Bab el-Mandeb, opting for the much longer and more expensive route around Africa to reach Asian markets.

Broader Regional Conflict

The incident is part of a broader and intensifying regional conflict. According to Reuters, the U.S. military conducted airstrikes on Iran for a 13th consecutive night. In response, Iran has reportedly fired on neighboring Arab countries that host U.S. military bases.

Iranian state media claimed missile strikes on Qeshm Island near the Strait of Hormuz and reported attacks on U.S. military sites in Jordan and Kuwait. Jordan's army confirmed it engaged several Iranian missiles and drones. The ongoing hostilities continue to stoke inflation globally, creating political pressure in the U.S. ahead of congressional elections.