Oil climbs above $100 as Middle East tensions hit shipping

Global oil prices surged above $100 per barrel on Friday, July 24, reaching their highest levels in over a month as escalating military tensions in the Middle East triggered a sharp rise in risk premiums. The price spike was driven by heightened concerns over potential disruptions to shipping through two critical maritime chokepoints: the Strait of Hormuz and the Bab el-Mandeb Strait.

The immediate catalyst was a series of attacks and threats against commercial shipping. In the Red Sea, Houthi forces aligned with Iran claimed to have targeted oil tankers, including Saudi-flagged vessels, and declared a naval blockade against Saudi Arabia. Simultaneously, Iran's Revolutionary Guards claimed control over the Strait of Hormuz, warning that the southern route was mined and that vessels required Iranian coordination to pass. These developments compounded existing market anxieties, as the United States confirmed a twelfth consecutive night of airstrikes against Iranian targets, part of a sustained military effort in the region.

Benchmark crude prices reacted sharply. Brent crude climbed to around $100, while West Texas Intermediate rose above $90. Analysts noted the market was pricing...