Oil prices jump as Hormuz, Red Sea crises deepen

Oil prices experienced a significant jump on July 24 as tensions escalated in the Gulf region. Brent crude crossed the $100 a barrel mark, marking a nearly 33% increase from last month's low, though it remained below the April peak of $126. The surge was primarily driven by attacks in the Red Sea, where Iran-backed Houthi rebels attacked two Saudi oil tankers and threatened to disrupt commercial traffic.

The Red Sea route had become a crucial relief valve for Saudi Arabia and the UAE, allowing partial oil exports via pipelines to ports outside the Gulf.

The United States retaliated with its 12th night of strikes on Iran, targeting missile and drone storage facilities and air defense systems. Iran, however, shows no signs of backing down. Energy analysts predict that a full blockade of the Red Sea could have a double impact on the global energy sector, following the Hormuz crisis. The narrow Bab el-Mandeb strait, crucial to the Red Sea route, is particularly vulnerable to a Houthi blockade.

With the availability of emergency oil reserves significantly reduced, some analysts warn that refilling efforts will be more expensive at the current rates, potentially causing further price spikes. The US Energy Information Administration reported that the US, the world's largest oil exporter, had hiked global deliveries during the war, reaching 5.6 million barrels per day in April. Meanwhile, China, the world's largest oil importer, cut its purchases to near-decade lows in the first months of the war.