Global oil prices surged past $100 a barrel on Thursday after Iran-backed Houthi rebels attacked two Saudi oil tankers in the Red Sea, triggering threats of "major military punishment" from the United States and condemnation from the European Union.
Red Sea attacks disrupt critical oil shipping route
The Bab el-Mandeb Strait, which connects the Red Sea to the Gulf of Aden, carries approximately 7% of global oil supplies. Houthi rebels claimed responsibility for striking two Saudi-flagged vessels on Wednesday, though Riyadh confirmed damage to only one—the Encelia—where a fire broke out on the bow. All crew members survived the attack, according to Saudi state media.
UK Maritime Trade Operations reported a separate incident 70 nautical miles southwest of the Saudi coast, where a tanker was hit by an "unknown projectile," igniting a blaze. The attacks come as Yemen’s Houthi movement, which has controlled much of the country for over a decade, escalates its campaign against Saudi interests with Tehran’s backing.
Oil markets react as US ramps up military readiness
Brent crude, the international benchmark, briefly topped $100 a barrel before settling at $99.48, while US benchmark West Texas Intermediate climbed 4.5% to $90.74. Gasoline prices followed, with the US national average rising to $4.09 per gallon, up from $3.94 a week earlier, AAA data showed.
The US military is reinforcing medical facilities in Germany and Maryland to treat service members wounded in operations against Iran. Over 150 additional medics have been deployed to Landstuhl Regional Medical Center, the largest American military hospital outside the US, with preparations underway at Walter Reed National Military Medical Center near Washington, DC.
Trump issues warning as EU condemns "dangerous escalation"
President Donald Trump threatened "major military punishment" for Iran and its Houthi allies if further attacks occur, writing on Truth Social: "If they do this again, the U.S. will hold Iran responsible... major military punishment will be inflicted." He described the Houthis as an Iranian "surrogate and/or proxy," expressing disappointment in their renewed aggression.
The EU’s foreign policy chief, Kaja Kallas, condemned the tanker attacks as "unacceptable" and "illegal," warning that Houthi threats to impose a naval blockade on Saudi Arabia "pose a direct threat to regional stability." She emphasized that navigation must remain unimpeded in both the Red Sea and the Strait of Hormuz.
What happens next in the Middle East crisis
The US-Saudi nuclear deal, announced Wednesday, could face complications as Trump tied its implementation to Riyadh joining the Abraham Accords, which normalize relations with Israel. The agreement excludes Saudi domestic uranium enrichment, a key demand from Washington.
Analysts warn that further Houthi attacks on shipping lanes could prolong oil market volatility, while US military movements suggest preparations for a potential escalation. Observers will watch for Iran’s response to Trump’s threats and whether the Houthis heed international calls to de-escalate.
