Oil Prices Climb as Red Sea Tensions and Regional Conflicts Persist

Brent crude for September delivery climbed $2.42 to reach $91.64 a barrel, while West Texas Intermediate followed a similar trajectory, with September contracts rising $2.25 to $84.73. Refined products saw mixed but largely upward movement, with active September contracts for ULSD and RBOB gaining 1.89 cents and 2.67 cents respectively.

The rally follows the collapse of a cease-fire agreement and the renewed closure of the Strait of Hormuz. Although mediators are currently attempting to negotiate a 10-day truce, the ongoing violence continues to fuel market volatility. Compounding these concerns are warnings from Yemen’s Houthi rebels regarding potential strikes against vessels operating at Saudi Arabian ports. Analysts at Rystad Energy estimate that such a blockade could disrupt approximately 2.5 million barrels per day of Saudi oil moving through the Red Sea.

Jorge León, Rystad’s senior vice president of geopolitical analysis, noted that the Houthis have demonstrated both the capability and the intent to disrupt commercial traffic. He warned that if diplomatic efforts fail and the Strait of Hormuz remains restricted, the market faces a substantial risk of a sharp price rebound.