Oil prices jump to five-month high as attacks threaten global supply

Oil prices jumped to a five-month high on Thursday after ​attacks in Saudi Arabia and hits to tankers in the strait of Hormuz threatened further disruptions to the world’s crude supply.

Brent crude, the international benchmark for oil prices, rose by 3% to hit $112 a barrel for first time since 18 May.

Yemeni Houthis, who are aligned with Iran, hit several targets in Saudi Arabia on Wednesday, with two people killed and eight more wounded in a civilian airport in Dammam, and two people killed in a drone attack on a Saudi oilfield.

Elsewhere the Iranian Islamic Revolutionary Guard Corps (IRGC) said four vessels involved in “illegal” oil transfers in the northern ​Gulf were hit and caught fire after being tracked by its forces on Wednesday.

It said three more vessels collided with mines west of the strait of Hormuz, and warned the US that continued provocations could lead to a wider response against its regional bases.

The US has now ordered some diplomats and family members to leave their missions in Saudi Arabia, and it plans to withdraw family members from a number of other missions in the Middle East, according to Reuters, who also reported that Saudi Aramco has instructed staff to evacuate its headquarters in Dhahran and work remotely.

Concern is growing that conflict in the region could escalate further, almost eight months after Tehran’s effective block on the strait of Hormuz triggered what many feared would bring the greatest energy supply disruption in the history of the market. In the first weeks after the US-Israeli attacks on Iran, oil surged past $100 a barrel and market observers predicted prices of up to $150 a barrel as flows through Hormuz came to a halt.

Oil peaked at $126 a barrel in April during the conflict and fell back below $100 in late May and then to lows of $71 at the start of July amid hopes of a ceasefire in the region. The price began to climb again after the memorandum of understanding between the US and Iran fell apart and fresh hostilities broke out in the Gulf.

However, data from Kpler has shown that oil exports from the Persian Gulf have now risen above their prewar levels, partly because of an increase in oil pumped overland through pipelines to the Red Sea and Gulf of Oman.

Global stocks wobbled on Thursday amid expectations of higher inflation and borrowing costs. The Stoxx Europe 600, which tracks the biggest companies on the continent, fell by 1%, with the UK’s FTSE 100 down by 0.7%.

In Asia, Japan’s Nikkei 225 index dropped 2.7%, while the South Korean Kospi fell 3.5%. Hong Kong’s Hang Seng index shed 3%.