Brent crude oil — the global benchmark for oil prices — surpassed $100 per barrel on 23 July 2026, rising more than 6% in a single day. It was the first time oil crossed that line since May 2026. The surge, part of a five-day rally, followed two simultaneous developments: Yemen's Houthis claimed strikes on two Saudi Arabian oil tankers in the Red Sea, and Iran's Islamic Revolutionary Guard Corps (IRGC) asserted full closure of the Strait of Hormuz.

The Houthis stated they attacked the tankers Encelia and Layla using ballistic missiles, cruise missiles, and drones, according to a statement distributed through SABA, the Houthi-run state news agency. A Saudi news agency confirmed that one of the two tankers was ablaze after the assault while sailing in the Red Sea. All crew members aboard both vessels were reported safe. The Houthis said the tankers were targeted for violating the group's previously declared naval blockade on shipments from Saudi Arabia. Al Jazeera reported the Houthi claim directly, without citing another outlet as intermediary, though the article did not name any specific Houthi official or spokesperson.

These strikes were not without warning. On 21 July 2026, Reuters reported that two tankers carrying Saudi crude reversed course in the Red Sea following a Houthi warning. The following day, more shipping data showed additional vessels changing route in the same waters. Asian refiners began exploring the Suez Canal as an alternative route for Saudi oil transport. Saudi Arabia condemned the Houthi naval blockade, warning it could disrupt oil flow to importers of Saudi crude. (The Hill)

The Red Sea disruption is one of two chokepoint crises driving the oil price rally. A chokepoint is a narrow body of water that ships must pass through, making it vulnerable to being blocked. A ceasefire between Iran and the United States, agreed in mid-June 2026, had largely collapsed, with fighting resuming around the Strait of Hormuz. As of 23 July 2026, the US military launched strikes on military targets in Iran for the 12th consecutive night. The IRGC declared the strait "completely closed" and under their control, warning that no tanker would be allowed to enter or leave without coordination with Iran.

US President Donald Trump threatened "major military punishment" against the Houthis if they continue to attack ships, adding a second front of potential US military escalation to the existing campaign against Iran.

The market response was swift. Goldman Sachs estimated that Brent crude could exceed $120 per barrel in Q4 2026 and average $100 in 2027 if the Strait of Hormuz remains disrupted. Susannah Streeter, chief investment strategist at Wealth Club, was cited in coverage framing the broader risk environment facing energy markets. (Reuters)

The convergence of these two chokepoint disruptions raises the stakes considerably. The Red Sea and the Strait of Hormuz together handle a substantial share of global seaborne crude and refined products. When both are simultaneously compromised, the shipping industry faces a compounding problem: rerouting via the Cape of Good Hope — the southern tip of Africa — adds transit time and cost, but that calculus assumes at least one major waterway remains functional. The Houthi blockade declaration on Saudi shipments, if sustained, effectively forces Saudi crude exports toward longer routes even if Gulf shipping lanes were to stabilize. The Suez Canal alternative that Asian refiners are exploring partially eases this, but its capacity is finite and it does not resolve the Hormuz closure for Gulf producers other than Saudi Arabia.

The broader diplomatic context here is equally consequential. The collapse of the mid-June ceasefire narrows the off-ramp. Twelve consecutive nights of US strikes on Iran, combined with the IRGC's strident posture on Hormuz, suggest neither side is currently prioritizing de-escalation. Trump's threat of "major military punishment" against the Houthis, if acted upon, would open a third theater of direct US military engagement in the region, potentially drawing in additional actors and further destabilizing maritime traffic.

For energy markets, the Goldman Sachs projection of $120 Brent in Q4 hinges on a specific condition: that Hormuz disruption persists. The Red Sea tanker strikes alone, while serious, target Saudi exports specifically rather than all transiting vessels. That distinction matters. A targeted blockade on one country's shipments is containable in principle; a declared closure of Hormuz by the IRGC is a systemic shock to global supply. Whether the IRGC's declaration translates into sustained interdiction of non-Iranian-flagged vessels remains the central variable, and the verified record does not yet confirm actual tanker seizures or attacks in the strait itself — only the claim of closure and the broader resumption of US-Iran hostilities.

Oil prices have risen for five consecutive sessions. The breakout above $100 Brent reflects market pricing of tail risk — the possibility that both chokepoints remain compromised through the second half of 2026. If either corridor stabilizes, prices could retrace. If both deteriorate further, the Goldman Sachs ceiling becomes a floor.