Brent crude oil, the international benchmark, surged to $99 per barrel on Tuesday after Saudi Arabia reported attacks on its energy infrastructure, leading to temporary operational pauses. U.S. crude oil prices also climbed more than 2.5% to nearly $94 per barrel, while wholesale gasoline prices increased by 1.4% [1]. The Saudi Press Agency attributed the attacks to the 'terrorist' Houthis and reported that 73 civilians were injured. The attacks also targeted commercial vessels in the Red Sea, raising concerns about the security of international maritime navigation [1].
The escalation in hostilities follows U.S. military action on Sunday, when three Iranian oil tankers were struck, resulting in the sinking of one vessel. This came after Iran launched ballistic missiles at U.S. Navy ships. The renewed conflict has significantly reduced traffic through the Strait of Hormuz, with only four ships passing on Saturday and six on Sunday, compared to pre-war levels when the strait carried over 20% of the world's energy supply [1]. Vessel transits in the Bab el Mandeb strait also fell 16% from the previous week, though overall traffic remained higher than in the Strait of Hormuz [1].
The national average gas price in the U.S. remained steady at $4.15 per gallon on Tuesday, but this represents an increase of 6 cents from a week ago and 14 cents from a month ago. Since the onset of the war, Brent crude has risen 36%, and the national average gas price has climbed 40%. Year-to-date, Brent prices are up more than 62%. Diesel fuel prices reached a record high of $5.90 per gallon over the weekend and have remained at that level [1].
Market analysts are warning of further upside risk. Goldman Sachs commodities analysts stated that if Persian Gulf oil flows remain constrained, 'Brent might exceed $120.' They identified intensified shipping attacks in the Strait of Hormuz and the Red Sea as the most likely catalysts for a scenario of lower output and higher prices [1]. Meanwhile, President Donald Trump commented that oil prices could 'drop precipitously' if the U.S. wins the war with Iran, suggesting prices could fall to as low as 'two dollars a gallon' [1].
CONCLUSION
The attacks on Saudi energy infrastructure and escalating conflict in the region have driven oil prices near $100 per barrel, with analysts warning of further increases if disruptions persist. Market sentiment remains cautious, with significant upside risk to energy prices and potential impacts on global supply chains. The situation continues to be closely monitored by both policymakers and market participants.