Oil Climbs Past $94 as Houthis Strike Saudi Tankers and US Bombs Iran for a 12th Day

Crude prices advanced again on Thursday as the war between the United States and Iran spread to the sea lanes that carry much of the world's oil. Yemen's Houthi movement said it attacked two Saudi Arabian oil tankers, the Encelia and the Layla, in the Red Sea, part of a maritime embargo it declared on July 20 against vessels serving Saudi ports, according to the Financial Times. A Saudi news agency confirmed one of the two vessels was hit, Dawn reported.

Brent crude settled up 3.4 percent at $94.07 a barrel on Wednesday and the US benchmark closed 2.9 percent higher at $86.83, then the rally accelerated on Thursday. Brent gained 4.6 percent to $98.44 a barrel, its highest level since late May, after an unidentified projectile struck a tanker off Saudi Arabia and US President Donald Trump threatened to bomb Iranian infrastructure in response to any attack on shipping in the Strait of Hormuz, CNBC reported. Secretary of State Marco Rubio said Iran was not ready to make a deal, and prices rose further as Washington played down the prospect of near-term diplomacy, NBC News reported. The Houthis, as Euronews reported, framed the blockade as retaliation for a Saudi siege on Yemeni ports and a strike on Sanaa's airport.

Two waterways are now disrupted at once. Traffic through the Strait of Hormuz and the Bab al-Mandeb strait fell sharply this week, and separately Ukrainian drone attacks halted loadings at the Caspian Pipeline Consortium's Black Sea terminal, which handles about 1.58 million barrels a day and 80 percent of Kazakhstan's crude exports, according to S&P Global. The Israeli financial daily Globes reported that Iran warned it would strike the power supply of Washington's regional allies if its own plants were hit, a threat it published Thursday.