Oil prices surge toward triple digits after Red Sea attacks

Oil prices rose Thursday to their highest level since early June after the latest Iran war escalation threatened severe new disruption to global supplies.

Brent crude oil, one of two key global benchmarks, rose more than 5% to nearly $99 per barrel in early Thursday trading. That is its highest level in seven weeks, since June 3.

U.S. crude oil also jumped for a second straight day, rising more than 4% to almost $91 per barrel and its highest since June 11.

The new surge in prices comes after the Tehran-backed Houthi rebels claimed attacks on two Saudi oil tankers in the Red Sea, following their announcement of a naval blockade on the kingdom.

It appeared to mark the first time since the Iran war began that ship attacks had spread beyond the vicinity of the Strait of Hormuz, opening up a new front in the volatile conflict.

The Houthi threat is so unsettling to oil markets because millions of barrels per day pass through the Bab el-Mandeb Strait in order to reach global markets.

About 12% to 15% of global maritime trade worth more than $1 trillion transits the waterway every year.

It has also served as an alternative to the Strait of Hormuz, where traffic remains largely at a standstill with ship crossings there falling to single digits on Tuesday.

Since the start of the month, oil prices have now risen about 35%. Those prices are now higher by more than 60% since the start of the year.

Along with oil prices, gas prices have risen too.

The national average price on Thursday rose to $4.09 per gallon, up from $4.06 on Wednesday, according to AAA data tracked by NBC News.

This has erased much of the progress toward lower prices that came after the U.S. and Iran signed a memorandum of understanding in mid-June.

That deal has now collapsed, with President Donald Trump threatening on Wednesday to blow up an Iranian bridge or power plant for every vessel attacked by Tehran.

Then, hours later, came the Houthi claim to have hit two tankers in the Red Sea.

The U.K.’s Maritime Trade Office reported a tanker “being struck by an unknown projectile” north of the critical Bab el-Mandeb Strait in the area. And the state-run Saudi Press Agency reported the Encelia was set ablaze by an attack while sailing overnight in the Red Sea, citing an unidentified source from the General Authority of Transport. It did not mention the Layla.

“Inflation has remained top of the agenda for markets this morning,” said Deutsche Bank’s global head of macro research Jim Reid, citing the jump higher in Brent oil. “Indeed, the strikes between the US and Iran show no sign of easing, and the Houthis said they targeted two oil tankers in the Red Sea yesterday, raising fears that the conflict is widening.”

That worry about inflation as a result of higher oil and gas prices has driven bond yields higher this week as a result. Early on Thursday, the U.S. 10-year Treasury bond was trading at 4.67%, its highest level since January 2025.

That 10-year bond has a heavy hand in steering consumer borrowing rates. On Wednesday, the average 30-year U.S. mortgage rate rose to 6.77%, its highest level since July 2025.

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