Oil crosses $100 as Houthis escalate Red Sea attacks

Brent oil shot to its highest price since May on Thursday as increased fighting in the Middle East threatens to slow the global flow of crude. It was just a few weeks ago that Brent had dropped below $72 per barrel, roughly back to where it was before the United States and Israel attacked Iran to begin their war, on hopes that the Strait of Hormuz would fully reopen to oil tankers.

Gasoline prices tend to rise with oil prices, and a gallon of regular costs an average of $4.09 across the United States, according to AAA.

The sharp rise in oil prices is largely due to Yemen’s Iran-backed Houthi rebels, who said they attacked two Saudi oil tankers in the Red Sea on Thursday, potentially widening the Iran war.

The Houthis have threatened to shut down another key trade route, with the world economy already reeling from Iran’s closure of the Strait of Hormuz. Iran and the U.S. have meanwhile stepped up their attacks as they vie for control of the strait, through which a fifth of the world’s oil and gas transited in peacetime, setting off a scramble for alternative routes.

As the U.S. carried out a 12th night of strikes across Iran, President Donald Trump threatened “major military punishment” against the Houthis if their attacks on ships continue.

“If they do this again, the U.S. will hold Iran responsible, in that the Houthis are a Surrogate and/or Proxy of Iran, and major military punishment will be inflicted upon Iran and, of course, the Houthis, themselves,” Trump wrote on social media.