Oil prices surged above $100/bbl for the first time in two months following attacks on Saudi Arabian tankers in the Red Sea by Iran-backed Houthi militants. This escalates a conflict already disrupting shipping through the Strait of Hormuz and raises concerns about supplies via the Red Sea, an alternative route for Saudi exports.

Adding to market jitters are repeated attacks on the Caspian Pipeline Consortium (CPC) terminal, impacting Kazakhstan's crude exports. These combined disruptions fuel fears of a significant supply squeeze, especially with global inventories already low. "The risks are great, not only to shipping, but also to energy infrastructure," warned Bob Mc Nally of Rapidan Energy Group.

Brent crude jumped roughly 8%, extending its monthly rally to over 35%. Dated Brent and diesel futures also reached multi-month highs. Analysts suggest continued escalation could push Brent above $120/bbl. "The focus now shifts to Saudi Arabia's response," noted Rebecca Babin of CIBC Private Wealth Group, highlighting rerouting inefficiencies. Market indicators, including Brent's prompt timespread and premiums for Middle Eastern crude, reflect tightening supply, with U.S. Strategic Petroleum Reserve inventories declining and Cushing, Okla., levels near minimums.