Oil prices rose above $98 a barrel for the first time since early June after Iran‑backed Houthi militants said they struck two Saudi tankers, the Encelia and Layla, in the Red Sea. The group claimed missile and drone hits, accusing the ships of violating its maritime embargo and warning of a blockade on Saudi Arabia.

Brent crude jumped 4.2 per cent to $98.10 in early London trading, pushing monthly gains over 30 % amid escalating U.S.–Iran tensions. Saudi state media confirmed a fire on the Encelia but said the crew was safe.

The attacks threaten a four‑year ceasefire and could disrupt shipping through the Bab al-Mandab Strait, a vital route linking the Red Sea to the Gulf of Aden. Saudi Arabia has been exporting nearly 4.9mn barrels of crude and refined products daily via its east‑west pipeline to Yanbu, according to data from Kpler.

Analyst Helima Croft of RBC warned that a sustained Houthi deployment would materially cut Red Sea oil flows and could shift market sentiment away from the belief that workarounds always exist. Riyadh vowed to take all measures needed to protect Red Sea shipping.