Brent Crude Breaches $100 as Tanker Strikes Choke Two Gulf Routes

Twin Chokepoints Under Pressure

Brent crude crossed $100 per barrel on Thursday, climbing 6.2 percent to $99.90 by midday GMT after briefly touching the triple-digit mark for the first time since late May. West Texas Intermediate rose 5.08 percent to $91.24, exceeding $90 for the first time since mid-June. The rally marks the fifth consecutive day of gains as Yemen's Houthi forces announced strikes on two Saudi oil tankers, opening a second front in a regional conflict that now threatens shipping through both the Strait of Hormuz and the Red Sea's Bab el-Mandeb strait.

The dual disruption carries immediate consequences for Asia's major economies. Japan, South Korea, India, and China collectively import more than half their crude through the Strait of Hormuz, while the Red Sea route via Suez handles roughly 12 percent of global seaborne oil trade. Singapore's refining hub, which processes over three million barrels daily, relies heavily on Middle Eastern supplies transiting both passages.

Houthis Declare Naval Blockade

The Houthis stated they would impose a naval blockade on Saudi shipments, targeting vessels carrying Saudi crude through Bab el-Mandeb after months of focusing attacks on traffic through Hormuz. Iran's Revolutionary Guards reported that one tanker caught fire following an explosion while attempting to navigate a mined route in the southern Strait of Hormuz near Oman's coast. Two additional vessels turned back. The Guards declared the strait "completely closed" under their control, warning that no tanker could transit without Iranian coordination while U.S. military operations continue.

The U.S. military completed a 12th consecutive night of strikes on Iranian targets, hours after President Donald Trump vowed to destroy an Iranian bridge or power plant each time Iran attacks a ship in Hormuz. Trump also reiterated threats against Pickaxe Mountain, a suspected nuclear site. Both Washington and Tehran have dismissed prospects for peace talks.

Goldman Sees $120 Scenario

Goldman Sachs projects Brent could exceed $120 per barrel in the fourth quarter and average $100 next year if Hormuz disruption persists through 2027. The investment bank flagged additional upside if the Bab el-Mandeb strait and Suez Canal face sustained closures. Pepperstone research strategist Ahmad Assiri noted that markets are pricing "a worrying probability of supply interruptions in a second chokepoint."

The targeting of the Red Sea route eliminates the detour Saudi Arabia relied on to maintain exports while Hormuz remained contested. That alternative had helped limit damage to the global economy during earlier phases of the conflict. Now, with both passages under threat, the kingdom's ability to buffer supply shocks has narrowed sharply.

Kazakhstan Adds to Supply Anxiety

Concurrent risks are building in Central Asia. Kazakhstan is being forced to halt crude shipments to its primary export terminal, the Caspian Pipeline Consortium facility on Russia's Black Sea coast, following drone attacks on tankers. The CPC terminal typically handles 1.5 million barrels per day, much of it destined for European and Asian buyers. The Russia-Ukraine war has made alternative export routes through the Caucasus and Caspian Sea unreliable, tightening supplies further.

Global inventories have been drawn down over recent months of conflict, leaving the market with minimal cushion to absorb additional disruptions. Rapidan Energy Group president Bob McNally, a former White House official, warned that "Round 2 of the military conflict is going to be broader than round 1. The risks are great, not only to shipping, but also to energy infrastructure."

Asia's Refiners Calculate Costs

Two China-owned tankers appeared undeterred by the escalating risks. Ship-tracking data showed one vessel exiting Bab el-Mandeb and another on course to follow. Chinese state refiners, which process over 15 million barrels daily, have limited short-term alternatives to Middle Eastern crude. India's refiners face similar constraints; the country imports roughly 85 percent of its oil, with the Gulf supplying the majority.

Higher crude prices will ripple through Asia's manufacturing economies. South Korea's petrochemical sector, Japan's transport fuel costs, and Southeast Asia's aviation industry all face margin pressure if Brent sustains triple-digit levels. Inflation, which had eased across the region in recent quarters, could accelerate if energy costs remain elevated into the fourth quarter.

For now, the market is pricing a prolonged standoff. With diplomacy stalled and military operations intensifying, the twin chokepoints that funnel Middle Eastern oil to Asian buyers remain under acute strain.