Oil Prices Exceed $100 a Barrel Amid US-Iran Conflict and Houthi Attacks

Oil prices rose past $100 (£74) a barrel on Wednesday following further strikes in the conflict involving the US and Iran, alongside ongoing Houthi attacks in Saudi Arabia. The increase in prices comes after the US conducted strikes on five Iranian tankers in response to Tehran targeting a US warship. Brent crude, the global benchmark for oil prices, reached its highest level since the end of July, coinciding with the collapse of a ceasefire between Iran and the US. On Tuesday, Yemen's Iran-backed Houthi movement attacked oil facilities in Saudi Arabia and has been targeting tankers in the Red Sea. Brent crude briefly dipped to $99.90 a barrel, but further escalation in the Middle East could lead to higher prices again. The US strikes targeted four Iranian tankers in the Gulf of Oman linked to Iran's Revolutionary Guards Corps (IRGC), as well as another tanker near Kharg Island. In retaliation, Tehran launched missiles at a US base in Jordan, most of which were intercepted, and claimed to have attacked two US vessels and eight oil tankers in the Strait of Hormuz. The Houthis and Saudi Arabia have been exchanging strikes since July after their informal ceasefire ended. The Houthis stated their missile attacks were in retaliation for a Saudi blockade and an airstrike on Sanaa airport. On Monday, they accused Saudi Arabia of bombing a prison in al-Hazm, resulting in 11 fatalities. The following day, Saudi authorities reported Houthi strikes on civilian and economic sites in Abha, Khamis Mushait, Jazan, and Najran. Oil prices have been volatile since the onset of the US-Iran conflict on February 28, which has contributed to regional instability. Prior to the conflict, Brent crude was priced around $70 (£52) a barrel. The situation has also led to concerns over the Strait of Hormuz, through which 20% of the world's oil and liquefied natural gas (LNG) is transported. The rising oil prices have resulted in significant increases in petrol prices globally. The tit-for-tat strikes between Iran and the US have intensified in the past week, following the US and Israel's attacks on Iran on February 28. The latest escalation was triggered by Iran's missile attack on a US warship, which was reportedly evaded successfully. In response, the US described the targeted Iranian tankers as part of a network funding the IRGC and its proxies. One of the struck vessels, the M/T Riesco, sank in the Gulf of Oman. Kharg Island, where one Iranian tanker was attacked, is crucial for Iran's oil exports, with 90% of the country's crude oil passing through it. Additionally, on Tuesday, the Houthis attacked energy facilities and civilian infrastructure in Saudi Arabia, injuring 73 individuals, according to Saudi authorities. The drone and missile attacks caused fires at oil facilities, temporarily halting operations. US Secretary of State Marco Rubio commented on the situation, stating, "Iran continues to try to hit US naval ships. And, for every time they do that or try to do that, they're going to lose tankers." The US strikes occurred shortly after Iran's Navy claimed to have seized an uncrewed US submarine in the Strait of Hormuz. US Navy Capt Tim Hawkins clarified that the underwater drone operated by US forces had malfunctioned and was not equipped with sensitive data collection capabilities. US operations in the region continue.