Oil benchmarks surge as supply routes choke
International Brent crude oil rose nearly 5% to more than $95 per barrel on Wednesday, while U.S. crude climbed above $88 per barrel. Since the start of July, oil prices have gained 30% and are up more than 55% since January, erasing the price drop that followed the short-lived U.S.-Iran memorandum of understanding in mid-June. The national average gas price in the U.S. rose to $4.06 per gallon, according to AAA data.
Strait of Hormuz traffic collapses
Only nine ships crossed the Strait of Hormuz on Tuesday, the vital waterway that normally handles about one-fifth of the world's oil supply. Iran has been demanding control over which vessels may transit the strait. The U.K. Maritime Trade Organization reported multiple attacks on vessels in the area, with crews abandoning ships in at least two incidents. The U.S. has continued airstrikes for an 11th straight night, with Defense Secretary Pete Hegseth testifying that the war has cost $37.5 billion so far.
Houthis open new maritime front
Iranian-backed Houthi rebels in Yemen announced a maritime blockade on Saudi Arabia, threatening the Bab el-Mandeb strait — the gateway to the Red Sea and Suez Canal. Several crude oil tankers changed direction in the Red Sea following the threat, and ING commodities analysts warned that supply risks are building again. Secretary of State Marco Rubio stated the U.S. would continue protecting commercial shipping, but the situation remains volatile.