More Red Sea chaos, as Trump repeats retaliation threat

(RTTNews) - Extending four consecutive sessions of gains, crude oil prices have catapulted on Thursday amid concerns of a wider conflict in the Middle East set off by new attacks by the Iran-backed Houthis in Yemen on two Saudi Arabian tankers in the Red Sea.

WTI Crude Oil for September month delivery was last seen trading up by $92.59 (or 6.63%) at $5.76 per barrel. The conflict between the U.S. and Iran that started on February 28 is yet to show indications for a peaceful resolution. Through a Memorandum of Understanding on June 17, the U.

S. and Iran agreed to settle disputes through peace talks. Following this, Iran reopened the Strait of Hormuz and the U.S. permitted Iran to export its crude oil and lifted the blockade on Iranian ports. The easing of tensions did not last long, however.

Within a month of signing the MoU, Iran fired at ships transiting via the Strait of Hormuz for not coordinating with Iranian forces and U.S. forces recommenced their attacks on Iran. In retaliation, Iran struck several U.S. bases in neighboring nations.

As of now, the U.S. military has conducted 12 consecutive nights of strikes against Iran. U.S. Central Command stated that through the attacks, the U.S. intended to degrade Iran's capabilities to conduct any further strikes on ships traveling through the strait.

U.S. President Donald Trump threatened that the U.S. would target a power plant or a bridge in Iran if it attempts to strike any ship across the Strait of Hormuz. In response, Iran stated that the conflict would grow broader if the U.S. attempts to hit Iranian infrastructure.

Aside from the verbal exchange of rhetoric, the strait saw no disturbances. Shipping traffic across the Strait of Hormuz has already come to a standstill. According to data from S&P Global, the vessel traffic dropped from 16 on Monday to 10 on Tuesday.

Markets awaited a breakthrough from the attempts by Pakistan in coordination with Qatar to de-escalate tensions between the U.S. and Iran. Against this backdrop, today the Houthi militant group claimed to hit two Saudi Arabian tankers, Encelia and Layla, in the Red Sea with cruise and ballistic missiles as well as drones.

The news caused jitters in the energy markets as today's moves by the Houthis threaten to open a new front in the ongoing gulf war, Millions of barrels of crude oil passed through the Bab el-Mandeb strait to reach global markets. The strait, which serves as an alternative to the Strait of Hormuz, is a strategic link that connects the Red Sea to the Indian Ocean through the Gulf of Aden.

According to data from S&P Global, the vessel traffic has dropped from 41 on Monday to 29 on Tuesday. Trump announced through Truth Social that if Houthis conduct any further strikes, Iran would suffer a major military punishment as the U.S. would hold Iran responsible for the group's actions.

In the Black Sea, Russia's Caspian Pipeline Consortium terminal has halted receiving oil from Kazakhstan due to attacks on tankers that prompted suspension of loadings. Oil production in Kazakhstan declined after the closure of the terminal. In the U.

S., the national average for a gallon of regular gasoline is $4.09 currently, according to the American Automobile Association. With the exchange of strikes between the U.S. and Iran showing no sign of easing coupled with fresh Houthi attacks, and the resultant higher oil prices, concerns about the risk of a surge in inflation that could force central banks to hike interest rates are increasing.

The U.S. dollar index was last seen trading at 101.47, up by 0.36 (or 0.36%) today. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Oil prices exceeded $100 per barrel on Thursday amid ongoing military actions and regional instability affecting Middle East supplies, according to market reports. Brent crude, the international benchmark, last reached this level in May following a period of lower prices in June.

Sectors including food production and shipping have cited prior energy cost increases, with some businesses indicating they may pass on expenses to consumers.

US President Donald Trump stated on Thursday that Iran would face major military punishment for Houthi strikes on two Saudi oil tankers in the Red Sea. Brent crude prices rose more than 6 percent and exceeded US$100 per barrel amid reports of further US air strikes on Iran and Iranian missile fire toward areas hosting US bases.

Iranian state media reported a missile impact on Qeshm Island near the Strait of Hormuz during the fifth month of the conflict.

September WTI crude oil (CLU26) on Wednesday closed up +2.49 (+2.95%), and September RBOB gasoline (RBU26) closed up +0.0186 (+0.58%). WTI crude oil prices (CLU26) are up more than +6% today after the Iran-backed Houthis launched a missile and drone attack on two Saudi Arabian oil tankers in the Red Sea, expanding the oil disruptions beyond the Strait of Hormuz and threatening oil shipments in the Red Sea.

Sep Brent crude oil prices (CBU26) are trading above $100 per barrel.Don’t Miss a Day: From crude oil to coffee, sign up free for Barchart’s best-in-class commodity analysis. The Houthis have vowed to blockade shipping linked to Saudi Arabia and warned shipowners against calling at the nation's ports.

The move threatens Saudi oil exports from Yanbu, a Red Sea hub that the Saudi's are using to ship crude since the war brought shipping through the Strait of Hormuz to a near halt. President Trump said Tuesday that if there is a blockade in the Red Sea, the US “will take care of it.

” Meanwhile, the US and Iran exchanged attacks for the 12th straight day, and the US maintained its blockade of Iranian oil shipments in the Persian Gulf. Global crude oil supplies are tightening due to reduced flows through the Strait of Hormuz. The International Maritime Organization warned last Wednesday that it is too dangerous to cross the Strait of Hormuz at the moment, and visible transit through the strait has fallen sharply as Iran continues targeting tankers attempting to transit it.

Crude prices also have support as Ukraine intensifies drone attacks on Russian oil infrastructure. Russian crude production fell to 8.928 million bpd in June, the lowest in 2.5 years, according to monthly OPEC data. According to EA Analytics, Russian crude-processing rates will average 3.

51 million bpd in July, the lowest in 24 years, amid damage to Russian energy infrastructure caused by drone and missile attacks from Ukraine. According to Bloomberg, Ukrainian forces have attacked Russian fuel-producing facilities more than 50 times this year, hitting at least 24 of Russia’s 34 largest refineries.

As of the end of June, around 90% of Russian regions have imposed some form of fuel rationing or reported supply issues, as refining capacity has plunged following damage to facilities. The strikes have deepened a nationwide gasoline shortage, with several major refineries shut down and the government banning almost all gasoline, jet fuel and diesel exports.

Russia is the world’s number two diesel exporter, after the US, according to Vortexa. Stronger Russian crude exports are also adding to global oil supplies, which is bearish for prices. Data compiled by Bloomberg show the four-week average of Russian crude exports rose to 4.

13 million bpd through June 28, the highest since Russia invaded Ukraine in 2022. Russia may be boosting its crude exports as the country’s refining capacity has plunged due to damage at its refining facilities from Ukraine drone and missile attacks.

The outlook for higher US crude output is negative for oil prices. The Department of Energy (DOE) on July 7 raised its US 2026 crude production estimate to 13.78 million bpd from a June estimate of 13.72 million bpd. As a bearish factor for crude, OPEC delegates said on May 14 that the cartel aims to continue a series of oil quota increases over the next few months, completing the return of halted oil production by the end of September.

The group already formally agreed to restore about two-thirds of the 1.65 million bpd supply cutback it made back in 2023 and said it plans to raise output targets further and to revive the final portion in three more monthly stages. On July 5, OPEC+ said it will boost its crude output by 188,000 bpd in August, though that increase might prove difficult due to revived US-Iran military attacks in the region.

OPEC’s June crude production rose by +2.34 million bpd to 18.75 million bpd. Vortexa reported on Monday that crude oil stored on tankers that have been stationary for at least 7 days rose +31% w/w to 90.03 million bbl in the week ended July 17. Wednesday’s weekly EIA report was mostly negative for crude oil and products.

EIA crude inventories unexpectedly rose +2.01 million bbl versus expectations of a -1.95 million bbl decline. Also, EIA gasoline supplies rose by +765,000 bbl versus expectations of a -1.9 million bbl decline. In addition, EIA distillate stockpiles rose by +1.

4 million bbl, a larger build than expectations of +825,000 bbl. On the positive side, crude supplies at Cushing, the delivery point for WTI futures, fell -624,000 bbl. Wednesday’s EIA report showed that (1) US crude oil inventories as of July 17 were -5.

3% below the seasonal 5-year average, (2) gasoline inventories were -7.1% below the seasonal 5-year average, and (3) distillate inventories were -9.6% below the 5-year seasonal average. US crude oil production in the week ending July 17 fell -0.5% w/w to 13.

798 million bpd, just below the record high of 13.862 million bpd posted in the week of November 7. Baker Hughes reported last Friday that the number of active US oil rigs in the week ended July 17 rose by +7 to a 13-month high of 452 rigs, up from the 4.

25-year low of 406 rigs posted in December 2025. However, the number of US oil rigs remains sharply below the 5.5-year high of 627 reported in December 2022. On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article.

All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.