Brent Surges 7.2% Back Above $100 as Houthi Attack on Saudi Tanker Blocks Two Major Export Routes
0xBroomberg
Brent crude jumped 7.2% to $100.82/barrel as Houthi attacks on Saudi tankers put both the Strait of Hormuz and the Bab el-Mandeb at risk simultaneously, while U.S. crude inventories hit a four-decade low — leaving almost no buffer to absorb further supply shocks.
Oil up 7% in a day — what happened?
Brent crude surged 7.2% to $100.82/barrel on Thursday, its first touch of triple digits in two months. WTI rose 5.8% to $91.83.
For the week, Brent and WTI are up more than 19% and 16% respectively — this is not routine volatility but a market pricing in the risk of physical supply disruption.
This means → the rally is not about demand growth; it is about fear that shipping lanes could be cut off.
What did the Houthis do, and why is this time different?
The Houthis declared a naval blockade on Saudi Arabia and struck two Saudi tankers — the *Encelia* and the *Layla* — with missiles and drones. Reuters reported the *Encelia* sent a distress signal near Jizan port; Saudi state media confirmed a bow fire.
The key escalation: previously the Houthis harassed commercial shipping mainly in the Bab el-Mandeb strait (the Red Sea's southern exit). This time, they struck Saudi vessels in Saudi coastal waters — effectively threatening both Hormuz and the Bab el-Mandeb at once.
In plain terms = Saudi oil has two export routes — east through Hormuz, west through the Red Sea. When Iran threatened the eastern route, Saudi Arabia rerouted west. Now the Houthis have blocked the western route too. Both exits are under threat at the same time.
Can ships just reroute?
With the Bab el-Mandeb closed, vessels can still reach Asian buyers via the Suez Canal, but the detour adds ten to fifteen days of sailing time.
The bigger problem: fully loaded supertankers — VLCCs — draw too much water to transit the Suez Canal. Owners must run partial loads, squeezing effective capacity and driving up freight costs for Asian refiners.
This means → even if the strait is not fully sealed, the jump in shipping costs alone pushes up end-user oil prices. TP ICAP analyst Scott Shelton put it bluntly: "There is clearly not enough oil for sale globally, and prices have room to go higher."
What risks are stacking up beyond the Middle East?
Ukraine continues to strike Russian energy infrastructure and Black Sea shipping, disrupting Kazakh crude exports through the Novorossiysk pipeline terminal.
U.S. crude inventories — commercial stocks plus the Strategic Petroleum Reserve — fell last week to their lowest level since the mid-1980s. This reflects a market with almost no cushion left to absorb price spikes.
In plain terms = three fires are burning on the supply side at once: Middle East shipping lanes under attack, Black Sea pipelines disrupted, U.S. stockpiles at rock bottom. Any one of these would be enough to move oil prices; all three together explain the current surge.
What to watch next?
President Trump warned Thursday of "major military punishment" against Iran and the Houthis if attacks continue. Iran immediately threatened to strike U.S. infrastructure and energy assets in the region — the rhetoric is escalating.
BOK Financial senior VP Dennis Kissler noted the Bab el-Mandeb is harder to blockade than Hormuz, and the Houthis have fewer resources than Iran, but "any major disruption will continue to put upward pressure on crude prices."
This means → whether oil holds above $100 hinges on two verification points: can the Bab el-Mandeb remain open, and is Iran genuinely ready to negotiate. Until both questions have answers, the risk premium stays.
Content is for reference only, not financial advice.