Oil prices had already been climbing all month. Middle East fighting pushed crude up roughly 30% in July. On Thursday, prices jumped sharply after news of tanker strikes in the Red Sea and Trump's threat of a "massive attack" on Iran.
Initially, Yemen's Houthi rebels, backed by Iran, announced that they had struck two Saudi oil tankers using drones and missiles, accusing them of breaking a maritime blockade the group had imposed on Riyadh this week.
Then President Trump told Axios he was "considering a massive attack" against Iran. "Bigger than ever before. I am close to making a decision. We are all set for it," Trump told Axios.
The result: Brent crude futures closed at $100.69 a barrel.
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Oil markets are dealing with more than just Red Sea tensions. Another critical route is in trouble.
During the current month, Ukrainian forces have struck over 150 tankers operating in the Black Sea and the Sea of Azov. Consequently, the Caspian Pipeline Consortium (CPC) has halted crude loading at its Black Sea export terminal. About 80% of Kazakhstan's crude is exported through that pipeline. Kazakhstan pumped 1.7 million barrels a day in June.
RBC Capital Markets' global head of commodity strategy, Helima Croft, noted that the duration of the closure remains uncertain. Kazakhstan has few alternative export routes, and they are not expected to compensate for the CPC loss, potentially leading to production cutbacks.
The strikes on tankers occurred shortly after Trump cautioned that the U.S. would demolish an Iranian bridge or power plant for every Iranian attack on a vessel in the Strait of Hormuz. In response, Iran warned that it would strike back at U.S.-affiliated infrastructure and energy facilities throughout the region should the U.S. follow through on those threats. "If the Americans target a bridge or a power plant in Iran, Iran will, in turn, strike infrastructure and bridges in the region, including energy facilities where the United States has interests," said a military source in Iran speaking to the state-run Tasnim News Agency on condition of anonymity.
Helima Croft cautioned that if a large-scale conflict erupted across the Middle East, Brent crude could exceed the historical peak of $146 per barrel set in 2008.
Oil markets have been rattled by simultaneous disruptions to two major chokepoints - the Red Sea and the Black Sea - raising fears of a prolonged supply crunch. The last time Brent crude traded above $100 was in May, and the rapid escalation in July reflects traders' growing anxiety over the stability of global energy flows. With both the Houthi blockade and the CPC shutdown showing no signs of immediate resolution, analysts expect continued upward pressure on prices.
The two simultaneous disruptions - the Houthi maritime blockade in the Red Sea and the halt of CPC exports due to Ukrainian strikes - have compounded supply worries, as both routes are critical for oil flows to global markets. With few immediate diplomatic off-ramps in sight, traders are bracing for further volatility and potential price spikes.
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