Fresh attacks on Saudi oil tankers have raised fears of a wider Middle East conflict, sending oil prices above $100 a barrel and increasing pressure on global shipping routes.
U.S. President Donald Trump has warned Iran and Yemen's Houthi movement of "major military punishment" after two Saudi oil tankers were attacked in the Red Sea. The latest escalation has expanded the conflict to another critical shipping route and pushed energy markets sharply higher.
The developments come as fighting between the U.S., Israel, and Iran enters its fifth month, with tensions continuing to spread across the region.
KEY DETAILS
The Houthis said they launched missile and drone attacks on the Saudi oil tankers Encelia and Layla, while Saudi authorities confirmed a fire aboard the Encelia after it was struck near Jizan. Reuters could not independently verify the reported attack on the Layla.
Trump said the U.S. would hold Iran responsible for any future Houthi attacks, describing the group as an Iranian proxy. He also told Axios he is considering renewed large-scale military operations against Iran.
Iran rejected Trump's warning. Foreign Minister Abbas Arachi criticized Trump's suggestion of using frozen Iranian assets to cover shipping damages, calling it a dangerous precedent.
Reuters sources said Iran recently sent Revolutionary Guard commanders, military advisers, and missile- and drone-related equipment to Yemen. The Houthis denied the claim.
The U.S. carried out airstrikes on Iranian targets for a 13th straight night, while Iran reported retaliatory strikes against U.S. military facilities in Jordan and Kuwait. Jordan said it intercepted most incoming missiles and drones, while neither the U.S. nor Kuwait reported casualties.
MARKET REACTION
Brent crude jumped more than 6%, climbing above $100 per barrel for the first time since May. Shipping insurance costs in the southern Red Sea doubled for some operators, and more tankers diverted away from the Bab el-Mandeb, increasing transport costs and delivery times.
WHY IT MATTERS
Two of the world's most important energy shipping routes - the Strait of Hormuz and the Bab el-Mandeb - are now under growing pressure. Any prolonged disruption could fuel inflation, raise energy prices, and increase volatility across oil, forex, and equity markets.
Markets will be closely watching whether further attacks trigger a broader U.S. military response and whether shipping through the region faces additional disruption. Political developments in Washington and Tehran are also likely to remain key drivers of market sentiment.
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Source: Reuters
Time: 10:30 AM EEST
