Oil prices crossed $100 a barrel for the first time since May after attacks on Saudi tankers intensified concerns that the Middle East conflict could disrupt two major energy routes. Brent crude, the global benchmark, climbed 7.2% to $100.88 on Thursday, according to the Associated Press, before easing to $99.70 in later trading reported by ABC News.
The move followed several days of gains as the United States increased military strikes against Iran and a temporary ceasefire broke down. Earlier on Thursday, Reuters had Brent at $98.64 after an intraday high of $99.09, reflecting how quickly prices moved as reports emerged from the Red Sea and the Strait of Hormuz.
The immediate concern is not that global supplies have already disappeared. It is that ships, insurers and exporters may decide the routes are becoming too dangerous, expensive or unpredictable to use normally. That distinction matters, although motorists rarely receive a discount for procedural nuance.
Why tanker attacks pushed crude above $100
The Houthis in Yemen were reported to have attacked two Saudi tankers in the Red Sea, threatening a route used by Saudi Arabia to avoid the Strait of Hormuz. The Associated Press, Reuters, ABC News and Deutsche Welle all linked the oil-price surge to the attacks.
There remains some uncertainty over the precise attribution of individual incidents. United Kingdom Maritime Trade Operations reported that a tanker was struck by an unknown projectile about 80 miles southwest of Al Shuqaiq. Saudi state media later confirmed a fire aboard the tanker Ansalia, but the official account did not identify who carried out the attack.
Reuters also reported a separate tanker fire near a mined route in the Strait of Hormuz and said two vessels had turned back. Those incidents widened the market’s concern from one shipping corridor to two.
US President Donald Trump said he was “very disappointed” in the Houthis and threatened “major military punishment” if the attacks continued. Saudi military spokesman Turki al-Malki said the coalition would take “firm and resolute” measures to protect commercial shipping.
The attacks may also place further strain on the informal Saudi-Houthi truce that has limited major fighting in Yemen since 2022. Any collapse would add another conflict risk to a region already dealing with direct US and Israeli military action against Iran.
Two shipping chokepoints are now under pressure
The supply threat involves both the Strait of Hormuz and the Bab el-Mandeb route connecting the Red Sea to the Gulf of Aden. Together, they provide access to export routes used by Gulf producers and major Asian buyers.
The US Energy Information Administration estimated that about 20 million barrels of oil and petroleum products passed through Hormuz each day in 2024. That was roughly 20% of global petroleum-liquids consumption, making it one of the world’s most consequential energy corridors.
Saudi Arabia has some alternatives. It can send as much as 2.5 million barrels a day through Egypt’s SUMED pipeline, according to the Associated Press, allowing cargoes to bypass Bab el-Mandeb. But that capacity covers only part of the volumes potentially exposed to disruption.
Lloyd’s List Intelligence described the renewed Red Sea threat as a “double whammy” alongside problems around Hormuz. The practical consequences could include longer voyages, higher insurance premiums and delays even if physical exports continue.
The exposure is uneven. Asian economies and Gulf exporters rely heavily on Hormuz, while only 8% of US crude imports came from the Middle East Gulf in 2025. American consumers are not insulated, however, because crude is traded in a global market. A disruption that raises the international benchmark can still increase US petrol prices regardless of where the imported barrel originated.
How volatile has the oil market become?
Brent’s return to $100 followed an unusually sharp rise and fall over a relatively short period. Energy Information Administration data show the benchmark reached $118 on 29 April and averaged $107 during May. It then fell to $72 on 26 June as expectations of a temporary US-Iran ceasefire reduced the perceived risk to supplies.
Prices had returned to levels last seen before the United States and Israel began military action against Iran on 28 February. That decline proved temporary after the ceasefire failed and military operations intensified again.
US Secretary of State Marco Rubio said this week that Iran’s leaders were “not ready to make a deal”. Without an agreement, traders are again pricing in the possibility that fighting could damage infrastructure or restrict shipping.
Helima Croft of RBC warned that a full regional war could push crude above the 2022 peak of $128 a barrel. That is a forecast based on a severe escalation scenario, not a current price target or evidence that such disruption has already occurred.
The latest trading also shows why snapshots can mislead. Reuters recorded Brent below $99 earlier in the session, the Associated Press later reported $100.88, and ABC News subsequently put it at $99.70. The important change was not a stable new level but a renewed risk premium tied to shipping security.
What higher energy costs mean for households
The effects are already visible at fuel stations. New data released on Thursday showed average UK petrol prices had risen by 5p a litre since the beginning of July, reaching almost £1.56. Diesel averaged £1.72 a litre, according to the RAC.
In the United States, average gasoline prices moved above $4 a gallon, compared with $3.92 a month earlier, according to motorist group AAA.
UK wholesale gas prices have also climbed over the past month. The benchmark was around 150p per therm, up from roughly 98p at the end of June.
Higher crude prices tend to feed directly into petrol and diesel costs. The broader impact comes through transport, manufacturing and energy bills. Businesses may absorb some of those costs, but sustained increases are often passed on through higher prices for food and other goods.
“More expensive fuel and energy can ripple through the wider economy, increasing costs for businesses and ultimately feeding through into the price of food and other goods,” said Jonathan Raymond, an investment manager at Quilter Cheviot.
That creates a particular problem because inflation had recently eased. UK inflation fell to 2.6% in the year to June, helped by slower increases in petrol and diesel prices. US inflation stood at 3.5%. Renewed energy pressure could make both improvements short-lived.
Why central banks may delay interest-rate cuts
Central banks cannot produce more oil or secure a shipping lane. They can, however, respond if an energy shock begins feeding into wider and more persistent inflation. That usually means keeping borrowing costs higher for longer, even when the original price increase came from events outside the domestic economy.
The Bank of England has kept its main interest rate at 3.75% for four consecutive meetings. Paul Dales, chief UK economist at Capital Economics, said the Bank would “almost certainly” leave rates unchanged again. Analysts still expect cuts next year if energy prices ease, but that outlook depends increasingly on the conflict and shipping conditions.
Raymond said policymakers could face pressure to delay reductions or even raise rates if energy costs remain elevated. That would affect mortgage holders and other borrowers already dealing with higher repayments.
In the United States, newly appointed Federal Reserve chair Kevin Warsh told Congress that the central bank had “no tolerance to persistently elevated inflation”. The Federal Reserve held its target range at 3.5% to 3.75% at Warsh’s first meeting as chair last month.
Trump had repeatedly pressed Warsh’s predecessor, Jerome Powell, to reduce rates and has made clear that he expects lower borrowing costs under the new leadership. Warsh, however, told Congress that restoring price stability remained the priority as the Middle East conflict affected energy prices.
For now, the central-bank question is not whether crude briefly crossed a round number. It is whether the disruption lasts long enough to change wages, business pricing and inflation expectations. A one-day spike may fade. A sustained threat to two critical shipping routes is considerably harder to dismiss.
