The price of Brent crude oil exceeded $100 per barrel for the first time since May

The price of Brent crude oil reached $100 per barrel for the first time since May, according to The Financial Times. Futures for Brent crude surged nearly 7% after reports emerged of attacks by Iran-backed Houthi militants on tankers in the Red Sea. This escalation could further reduce global oil supplies and reignite a global inflationary shock, the FT reports.

As a result, Brent futures are on track for a monthly gain of about 36%—if this holds, it will mark the third-largest rally in a decade, CNBC noted.

Futures contracts for North American WTI rose 5.6% on July 23 and were trading at nearly $92 per barrel. They could gain about 30% over the course of the month and also post one of the three strongest gains of the decade.

The Houthis’ attacks on ships effectively threaten to block the most critical alternative to the closed Strait of Hormuz—the Bab el-Mandeb Strait, which connects the Red Sea to the Gulf of Aden and the Indian Ocean. This route became crucial for Saudi Arabia’s oil exports during the Iran crisis.

Some ships are already avoiding this route, while buyers in India and other Asian countries are considering switching to longer—and likely more expensive—routes through the Suez Canal, according to Bloomberg.

All of this is happening against the backdrop of supply issues from Kazakhstan—one of the largest oil producers. The country was forced to halt pumping to its main export terminal on Russia’s Black Sea coast—a facility operated by the Caspian Pipeline Consortium—following a series of drone attacks on oil tankers.

This article was AI-translated and verified by a human editor