Oil Surges Above $100 as US-Iranian Strikes and Houthi Attacks Disrupt Regional Energy Supplies

Oil prices climbed to $100 (£74) a barrel on Wednesday for the first time since July, as a sharp escalation in military activity involving the United States, Iran, Yemen's Houthis and Saudi Arabia intensified fears over the security of global energy supplies.

Brent crude, the global benchmark for oil prices, rose 2.83% from Tuesday to reach $100.70 a barrel by Wednesday afternoon. The latest increase came after a series of attacks on shipping and energy infrastructure across the Gulf and surrounding waters.

The United States said it had attacked five Iranian oil tankers in retaliation for Iranian attempts to target an American warship. Iran's Islamic Revolutionary Guard Corps (IRGC), meanwhile, said it had attacked eight tankers and two warships, as well as a US military base in Jordan.

The IRGC also announced plans to establish a new "prohibited zone" for shipping. The proposed area would extend beyond the Strait of Hormuz into the Arabian Sea and would cover part of the Sea of Oman and waters along routes leading towards the strategic strait.

The latest escalation comes after months of heightened tensions in the region. Before the war involving the US, Israel and Iran began in February, Brent crude had been trading at around $70 (£52) a barrel.

The price has now risen sharply as attacks on commercial shipping, combined with a US naval blockade of Iranian ports, have effectively closed the Strait of Hormuz to normal traffic. The waterway is one of the world's most important energy routes, with around 20% of global oil and liquefied natural gas (LNG) shipments normally passing through it.

The surge in crude prices has also begun to affect motorists, with petrol prices rising in countries around the world.

US strikes on Iranian tankers

The US military's Central Command, known as Centcom, said its latest operation destroyed five Iranian oil tankers.

Four of the vessels — Kaviz, Charminar, Horizon 1 and Riesco — were struck in the Gulf of Oman. A fifth tanker, Derya, was attacked near Kharg Island in the northern Gulf.

Kharg Island is home to Iran's principal oil-export terminal and is therefore a crucial part of the country's energy infrastructure.

Centcom said US forces had ordered the crews of the tankers to abandon their vessels before the attacks were carried out.

According to the US military, the strikes followed two separate incidents in which Iran's Revolutionary Guards fired ballistic missiles at an American warship over a period of two days.

Centcom said the US warship successfully avoided the missiles and that no American military personnel were injured.

Iran, however, described its subsequent military actions as retaliation for the US attacks.

The IRGC said its Aerospace Force fired missiles at maintenance facilities, aircraft hangars and planes at Muwaffaq Salti Air Base in Jordan.

Jordan's armed forces said they had intercepted 20 Iranian missiles, while two additional missiles landed in areas without inhabitants. No casualties were reported.

The IRGC later claimed that its naval forces had attacked two US Navy destroyers and eight oil tankers in the Strait of Hormuz, saying the vessels had suffered "heavy damage".

The US military rejected the claim concerning its warships, saying the assertion that two American naval vessels had been struck was false.

Merchant ships caught in the fighting

The continuing military confrontation has also raised concerns about the safety of commercial shipping in the Gulf and nearby waters.

The UK's Maritime Trade Operations agency said it had received reports that several merchant vessels in the northern Gulf and Gulf of Oman had been "subject to disabling fire as part of ongoing military activity in the region".

The agency also reported that a vessel located 24 nautical miles, or approximately 45km, north-west of Port Rashid in the United Arab Emirates was seen "listing while at anchor, possibly indicating water ingress following an attack from an unknown projectile".

In Iraq, authorities said they had extinguished a fire aboard the Panama-flagged tanker New Andros after the vessel was hit by a drone in the Gulf.

The tanker was reportedly carrying two million barrels of fuel oil at the time of the incident.

The attacks come as shipping companies and governments face growing uncertainty over whether vessels can safely navigate one of the world's most strategically important maritime corridors.

Iran threatens new shipping exclusion zone

Iran has also warned that it intends to impose further restrictions on maritime traffic.

On Wednesday afternoon, IRGC spokesman Hossein Mohebi told Iranian state television that the coordinates of a new "prohibited zone" would soon be announced.

He said the area would cover "part of the Sea of Oman and another part of the Arabian Sea, along the route that can lead to the Strait of Hormuz".

Mohebi warned that ships entering the area without prior coordination would face consequences.

"If a vessel enters that area without co-ordination, it will be subject to our sanctions," he said.

The announcement could further complicate shipping through waters that are already facing significant disruption because of the wider conflict.

US Secretary of State Marco Rubio, speaking to reporters in Colombia on Tuesday, said the US response to Iranian attacks was straightforward.

"Iran continues to try to hit US naval ships. And, for every time they do that or try to do that, they're going to lose tankers. And I think you'll see that again today," Rubio said.

The US strikes on the Iranian tankers occurred only hours after Iran's Navy said it had captured an uncrewed American submarine in the Strait of Hormuz.

However, US Navy Captain Tim Hawkins, a Centcom spokesman, said the vessel was not captured as part of an American military operation against Iran. He said an "underwater drone operated by US forces malfunctioned more than a day ago" and explained that the equipment had been deployed to survey the waters of the region.

Fighting between Saudi Arabia and the Houthis

The conflict is also spreading across Yemen and Saudi Arabia, where the Iran-backed Houthis and Saudi forces have been exchanging attacks.

Saudi Arabia and the Houthis have traded fire as tensions have increased following the breakdown of a four-year ceasefire in Yemen.

The ceasefire began to unravel in July, after which the Houthis resumed attacks on Saudi energy infrastructure and tankers operating in the Red Sea.

Following Saudi air strikes on Sunday and Monday, the Houthis accused Saudi forces of bombing a prison in Hazm.

Yahya Sarea, the group's military spokesman, said on Wednesday that rescue teams had recovered the bodies of 23 civilians from the rubble.

Saudi Arabia, meanwhile, said that the Houthis had launched dozens of drones and missiles on Tuesday against civilian and economic targets in the southern Saudi cities of Abha, Khamis Mushait, Jazan and Najran.

Saudi authorities said 73 civilians were injured in those attacks.

They also reported fires at oil facilities, resulting in a temporary suspension of operations.

The Houthis responded by reporting more than 50 Saudi air strikes on Wednesday across areas under their control. The strikes were reported in the provinces of Marib, Jawf, Taiz, Hudaydah, Saada and Bayda.

There was no immediate response from the Saudi military regarding the reported strikes.

Battle for the Bab al-Mandab Strait

The situation in Yemen has also deteriorated along the country's south-western coast.

Heavy fighting has been reported since Thursday, when Houthi forces launched an offensive against Yemeni pro-government forces backed by Saudi Arabia.

The Houthis are seeking to take control of the Bab al-Mandab Strait, a strategically important waterway linking the Red Sea with the Gulf of Aden.

Control of the strait would give the Houthis greater influence over a major international shipping route connecting the Red Sea to the wider maritime trade network.

The latest fighting has reportedly resulted in more than 500 deaths and forced almost 20,000 people to leave their homes.

With attacks now affecting oil tankers, commercial vessels, military ships and energy infrastructure across several countries, concerns over the regional conflict's impact on global oil supplies are growing.

The surge in Brent crude above $100 a barrel reflects those fears, particularly the risk that continued fighting could further restrict traffic through the Strait of Hormuz and other critical maritime routes.

For global consumers, the consequences are already becoming visible through higher fuel prices, while any further disruption to oil and LNG shipments could place additional pressure on energy markets worldwide. 

By fLEXI tEAM