Oil prices surge past $100 a barrel as Yemen attacks threaten Saudi exports

KUALA LUMPUR, 23 JULY 2026 —

Oil prices broke above $100 a barrel for the first time in two months on Thursday after Yemen’s Houthi militia claimed responsibility for attacks on two Saudi oil tankers in the Red Sea.

Benchmark Brent crude jumped to $102 a barrel from $95 the previous day, according to trading data. The surge follows Houthi missile and drone strikes on the Saudi tankers Encelia and Layla, one of which caught fire. The militia said the vessels violated its Red Sea blockade, escalating a conflict that has simmered since US-Israeli strikes on Iran in April.

Analysts warned renewed supply disruption could push prices toward $120 a barrel, reigniting inflationary pressures after years of energy cost increases. The market had briefly touched $126 a barrel in April when Iran threatened to block the Strait of Hormuz, then retreated below $100 in late May and to $71 in early July amid ceasefire hopes. Prices climbed again after US-Iran talks collapsed and fresh Gulf hostilities erupted.

Fatih Birol, head of the International Energy Agency, said “cushioning factors” had so far prevented runaway prices but warned this week that escalation left “no room for complacency.”

Government borrowing costs rose across major economies on Thursday as investors priced in higher inflation risk. US, German and Japanese bond yields climbed, while the yield on UK 10-year gilts jumped by about 0.1 percentage point to trade above 5.1% for the first time since May. Analysts linked the move to oil-driven inflation concerns and jitters over UK Prime Minister Andy Burnham’s tax and spending plans.

Chris Beauchamp, chief market analyst at IG, said the rise in yields “spells major trouble for developed economies and risks a repeat of the March/April 2025 market panic.” He added that volatility is surging and equities are moving further into the red as a return to full-blown conflict now looms, potentially drawing in Israel and more regional states.