Economy News

Oil tops $100 again as Houthis hit Saudi tankers and threaten the Red Sea escape route

Brent crude broke above $100 a barrel on Thursday 23 July for the first time since May, after Yemen's Houthis claimed attacks on two Saudi Arabian oil tankers in the Red Sea, Al Jazeera reports. It was the fifth straight daily rise; ABC News (Australia) says Brent rose more than 6% overnight. The Houthis had warned shippers not to load at Saudi ports and announced a blockade of Saudi exports through the Bab al-Mandab strait.

The route matters because Hormuz is still effectively closed after the mid-June US-Iran ceasefire collapsed. The Guardian says Saudi Arabia has been sending about 75% of its usual exports through its pipeline to Yanbu on the Red Sea, with about 2.5m barrels a day moving south through Bab al-Mandab, according to Rystad Energy. Brent was as low as $71 at the start of July. Stocks also fell, with the Nasdaq down more than 2%.

“That was a safety lever, but that's now gone.” — Kevin Morrison, IEEFA, via ABC News

How each outlet framed it

• The Guardian — the arithmetic of a second chokepoint, a Houthi official's claim that prices could hit $200, and bond yields rising on inflation fears.
• Al Jazeera — the forecasts: Goldman Sachs says Brent could top $120 in the fourth quarter and average $100 next year if Hormuz stays disrupted; Trump threatened “major military punishment” over the attacks.
• ABC News (Australia) — the local hit: Australia relies entirely on imported oil, and an analyst warned supplies could get “a lot tighter”. It also reports that Aramco has begun offering more shipments from Egyptian ports.

What we don't know yet: whether shipping can keep using the strait. The Guardian says at least five Saudi-linked tankers bound for Bab al-Mandab turned back.