Brent crude hit $100.10 a barrel on Thursday after Houthi forces struck two Saudi tankers near the Bab el-Mandeb Strait. The conflict that has already paralysed the Strait of Hormuz has now extended into the Red Sea. Together, these two chokepoints carry one-third of the world’s seaborne crude. Both are now active war zones.
The world’s most critical oil supply route was already under siege. Now the backup route is under attack too.
On Thursday, July 23, Brent crude crossed $100 per barrel for the first time since May — settling at $100.10, up $6.07 or 6.45 percent on the day. West Texas Intermediate rose 5.37 percent to $91.49 a barrel. The move extended a rally that has now run for five consecutive trading sessions and has pushed Brent up approximately 42 percent in just 20 days.
The trigger was a Houthi announcement that sent tanker operators scrambling. Yemen’s Iran-backed Houthi forces claimed they targeted two Saudi oil tankers — the Encelia and the Layla — with missiles and drones near the Bab el-Mandeb Strait, citing violations of a naval blockade the group declared earlier this week against Saudi ports and shipping. The Saudi Press Agency confirmed the Encelia was hit and caught fire at the bow off Jizan and Al Shuqaiq, though all crew members were reported safe. The UK Maritime Trade Operations received a separate report of a tanker struck by an unknown projectile approximately 70 nautical miles southwest of Saudi Arabia.
At least two additional tankers turned away from the Bab el-Mandeb Strait entirely after the claims were confirmed. The diversion decisions tell the real story. When ship operators divert rather than transit, the market prices the closure — and the closure of the Bab el-Mandeb, combined with the already-disrupted Strait of Hormuz, represents a supply shock with no clean alternative route available at scale.
Why This Is Categorically Different From Earlier Escalations
Every escalation in this conflict has been described as significant. This one actually is — for a structural reason that requires clear explanation.
The Strait of Hormuz, the primary flashpoint since the conflict began in late February, handles the bulk of Gulf crude exports moving east and west through the Persian Gulf. When the Hormuz situation deteriorated, shipping companies began rerouting through the Red Sea and the Suez Canal as an alternative corridor, particularly for Saudi crude originally shipped from Persian Gulf terminals.
Saudi Arabia had already been adapting to that pressure. The kingdom managed to redirect more than 70 percent of its exports that previously shipped from Persian Gulf terminals to its Red Sea port of Yanbu — a deliberate strategic pivot designed to maintain export volumes despite Hormuz disruption. The Houthi blockade announcement this week, and Thursday’s tanker strikes near Bab el-Mandeb, directly attacks that rerouted supply chain.
One of the two tankers struck was reportedly loaded with Saudi crude bound for India. The other was carrying oil to China. These are not random commercial vessels. They are the supply lines through which two of the world’s three largest oil-importing economies are currently receiving their energy. When those vessels are struck in a declared blockade zone, the market has no ambiguity about the supply implications.
Together, the Strait of Hormuz and the Bab el-Mandeb Strait handle roughly one-third of the world’s seaborne crude oil trade, with an estimated 25 to 30 million barrels passing through both chokepoints every day. The scenario the market has been pricing as a tail risk since the war began — simultaneous disruption to both major Gulf oil export corridors — is now a present reality rather than a future concern.
What the Houthis Said — And What Washington Said Back
Houthi military spokesman Yahya Saree was direct and specific. “We targeted two Saudi oil tankers, named Encelia and Layla, for their violation of the blockade decision issued by the armed forces,” he said in a statement carried by Al Jazeera.
The blockade declaration that preceded Thursday’s strikes had already shifted the strategic calculus significantly. By declaring a naval blockade of Saudi ports and shipping earlier this week, the Houthis elevated their interdiction operations from opportunistic attacks into a formal military policy — one that frames every vessel transiting the area as a legitimate target if it does not comply with Houthi authority over the strait. That framing matters because it removes the possibility of dismissing individual attacks as isolated incidents. The blockade is a stated, ongoing policy, and Thursday’s strikes were its first enforcement actions.
Washington responded with characteristic public certainty and private complexity. President Trump said the United States would hold Iran directly responsible for any future Houthi attacks in the Strait of Hormuz, threatening “major military punishment” if the group targets ships again. Secretary of State Marco Rubio, speaking on the sidelines of the ASEAN summit of foreign ministers in Manila, took a different tone — saying the Houthis had been “suckered into this by the Iranians” and calling on the group to de-escalate. “They shouldn’t really do that,” Rubio said.
The gap between Trump’s threat of major military punishment and Rubio’s sympathetic framing of the Houthis as Iranian dupes reflects a US administration that has not yet settled on a coherent response to the Red Sea escalation. Rubio simultaneously claimed that Iran was “begging us, both directly and indirectly” for a deal, while saying Tehran did not appear ready to make one because every time they agreed, “people in charge either break it or they want to change it.”
Iran’s Foreign Ministry pushed back sharply. Spokesperson Esmaeil Baghaei accused the US ruling establishment of pursuing a strategy that creates crises rather than resolving them, rejecting the framing that Iran was responsible for Houthi military decisions.
The US House Vote — Congress Tries to Reclaim the War
On Thursday, the US House of Representatives voted to halt the Iran conflict absent congressional authorisation — a war powers challenge to Trump’s unilateral conduct of military operations against Iran and its proxies that adds a domestic political dimension to an already complex foreign policy situation.
The vote does not immediately stop US military operations. It is a political signal — from a legislature that has watched an undeclared war unfold for five months without a formal authorisation vote — that the executive branch cannot conduct open-ended military operations in the Middle East indefinitely without congressional accountability. Whether the Senate takes up the measure, and whether Trump would veto it if it passed, are the questions that will determine whether Thursday’s House vote has operational consequences or remains a statement of principle.
The US average petrol price crossed $4.09 per gallon on Thursday — a psychologically significant threshold that translates the Middle East conflict directly onto American voters’ weekly budgets and adds domestic political pressure on an administration managing an undeclared war with rising fuel costs.
Saudi Arabia’s 36 Percent Drop in Oil Loadings
The macro supply impact of Houthi threats on Saudi export operations was already visible before Thursday’s tanker strikes.
Saudi oil loadings dropped by 36 percent as Houthi threats disrupted Bab el-Mandeb passage — a figure that quantifies the market disruption even before confirmed vessel damage was reported. A 36 percent reduction in Saudi oil loadings from the Red Sea corridor means that the crude those tankers were carrying is not arriving at its destination on schedule. For India and China — both of whom depend on Saudi crude for a significant portion of their energy needs — that reduction lands directly on refinery intake schedules, diesel and petrol production capacity, and ultimately on fuel prices paid by consumers thousands of kilometres from the Yemeni coast.
UBS strategist Giovanni Staunovo summarised the market’s read on Thursday’s situation precisely: “Escalating tensions in the Middle East that are disrupting oil exports, together with drone strikes in the Black Sea, have once again tightened the oil market.” The Black Sea reference is significant — it places Thursday’s events in a global supply disruption context that extends beyond the Gulf alone, with multiple energy corridors under simultaneous pressure.
What $100 Oil Means for Pakistan — Right Now
Pakistan’s consumers have already lived through the arithmetic of $100 oil once this year. When Brent surged above $100 during the conflict’s most acute phase in April, petrol at the pump in Pakistan crossed Rs. 458 per litre. The subsequent ceasefire brought oil back below $80 and petrol back toward Rs. 297.
Petrol is currently priced at Rs. 310.71 per litre following the July 11 fortnightly revision — a price that was set when Brent was tracking in the $75 to $78 range. With Brent now at $100 and the supply shock that produced Thursday’s move showing no sign of reversing quickly, the next fortnightly revision will almost certainly push petrol significantly higher.
The mechanism is direct and unavoidable. Pakistan imports the overwhelming majority of its petroleum. Its fortnightly pricing formula uses the average international oil price across the review period. Every dollar that Brent holds above $80 translates into a meaningful rupee increase at the pump within days of the next review. If Brent sustains above $100 for the remainder of the current pricing period, the next petrol price could realistically exceed Rs. 350 per litre — a level not seen since the wartime peak period.
The telecom sector, which burns 1.2 billion litres of diesel annually to keep Pakistan’s cell towers running, will face fresh cost pressure that will renew the tariff increase debate the PTA only recently navigated. Transport costs, already a primary driver of food inflation, will rise again. The ripple effects of $100 oil through Pakistan’s import-dependent economy are not delayed. They arrive at the next fuel revision.
Analyst’s Take
When looking closely at what changed on Thursday, the most important shift is not the $100 price level itself. Price levels are reversible. What is not easily reversible is the strategic geography of this conflict.
The Houthis have now operationalised a declared naval blockade of Saudi shipping through the Bab el-Mandeb. That is not an opportunistic missile launch. It is a military policy with a stated legal framework — however illegitimate that framework is under international law — and enforcement actions that have now been carried out against specific named vessels. Reversing a declared blockade requires either military defeat of the blocking force, a negotiated agreement, or a political decision by the declaring party to stand down.
None of those outcomes are imminent. The Houthis have survived years of Saudi-led coalition military operations and multiple rounds of US strikes. Their willingness and capability to enforce a Red Sea blockade is not in question after Thursday. What is in question is whether the US and Saudi Arabia have the appetite and the military capacity to reopen the strait without a ground campaign in Yemen — which no party has publicly contemplated.
The oil market priced this scenario at $100 on Thursday. If the blockade holds, if Saudi loadings remain 36 percent below normal, and if tanker operators continue diverting away from Bab el-Mandeb rather than risking their vessels, $100 is not the ceiling. It is a floor.
The world is now managing simultaneous disruption at both of the Gulf’s critical oil export chokepoints. That has not happened before in the modern energy era. There is no historical precedent to draw on for how markets, governments, and supply chains respond when both corridors are closed at the same time. Thursday, July 23, 2026, was the day the experiment began in earnest.