Oil prices jumped to their highest level in five months this week after attacks in Saudi Arabia and strikes on vessels near the Strait of Hormuz raised fresh fears of a wider disruption to the world's crude supply, nearly eight months after the Gulf conflict first threatened to choke off the waterway entirely.
Brent crude, the international benchmark, rose roughly 3% to touch $112 a barrel, its highest level since May 18. Yemen's Houthi movement, which is aligned with Iran, struck multiple targets in Saudi Arabia, killing two people and wounding eight more in an attack on a civilian airport in Dammam, and killing two others in a drone strike on a Saudi oilfield. Separately, Iran's Islamic Revolutionary Guard Corps said it had struck four vessels engaged in what it called "illegal" oil transfers in the northern Gulf, setting them ablaze, and said three additional vessels had hit mines west of the Strait of Hormuz — warning that continued provocations could draw a wider response against American bases in the region.
Washington Pulls Back Diplomatic Staff
The United States has ordered some diplomats and their families to leave missions in Saudi Arabia, with further withdrawals from other regional postings reportedly under consideration, while Saudi state oil giant Aramco has told staff to evacuate its headquarters in Dhahran and work remotely. The moves point to a real escalation in risk perception among governments and companies with a direct stake in the region, even if oil flows themselves have not yet been meaningfully disrupted.
That is the striking part of the current picture: despite the wave of attacks, data from the trade-tracking firm Kpler shows oil exports from the Persian Gulf have actually risen above their pre-war levels, helped by growing volumes pumped overland through pipelines toward the Red Sea and the Gulf of Oman that bypass the strait altogether. The rerouting illustrates how much resilience has been built into regional supply chains since fighting first broke out, even as headline prices react sharply to every new flashpoint.
A Market Still Shaped by This Year's Whiplash
Oil's path this year has been extraordinarily volatile: prices surged past $100 a barrel in the weeks after U.S. and Israeli strikes on Iran, with some forecasters at the time predicting $150 oil as flows through Hormuz briefly ground to a halt. Prices then peaked near $126 a barrel in April before falling back below $100 by late May and down to roughly $71 at the start of July amid hopes for a ceasefire. That ceasefire effort collapsed, and prices have been climbing again as fresh hostilities break out across the Gulf. Global stock markets wobbled alongside oil's latest move, with Europe's Stoxx 600 falling 1% and Britain's FTSE 100 down 0.7%, as investors weighed the prospect of higher inflation and borrowing costs feeding through from more expensive energy.