Oil prices jumped to a five-month high on Thursday as attacks in Saudi Arabia and the Strait of Hormuz threatened global crude supply. Brent crude, the international benchmark, rose 3% to $112 a barrel, its highest level since May 18. Yemeni Houthis, aligned with Iran, targeted Saudi infrastructure, causing casualties at a civilian airport and an oilfield. The Iranian Islamic Revolutionary Guard Corps reported striking vessels in the northern Gulf, citing "illegal" oil transfers, and warned of wider responses against U.S. bases if provocations continue.
The U.S. ordered some diplomats and family members to leave Saudi missions and plans to withdraw families from other Middle East posts. Saudi Aramco instructed staff to evacuate its Dhahran headquarters. Conflict escalation fears grew after Tehran effectively blocked the Strait of Hormuz nearly eight months ago, prompting concerns of the greatest energy supply disruption in market history. Despite earlier predictions of $150 per barrel, data shows Persian Gulf oil exports have risen above prewar levels via overland pipelines.
Global markets wobbled with inflation concerns. The Stoxx Europe 600 fell 1%, the FTSE 100 dropped 0.7%. In Asia, Japan's Nikkei 225 fell 2.7%, the Kospi dropped 3.5%, and Hong Kong's Hang Seng shed 3%. American Airlines shares dropped nearly 4% pre-market after the company warned high fuel costs would push it into a loss, abandoning its previous profit forecast.
Source: Wall Street Journal US Business · Summarized by HeadlinesBriefing