Crude Nears $100 As Houthi Strikes Fuel Supply Disruption Concerns

Brent crude prices climbed above $98 a barrel on Thursday, extending gains for a fifth consecutive session and touching a six-week high as escalating tensions in West Asia and fresh Houthi attacks on oil tankers in the Red Sea fuelled fears of disruptions to global crude supplies.

The rally comes amid the ongoing conflict between the United States and Iran, with concerns mounting over the security of two of the world's most critical energy trade routes — the Strait of Hormuz and the Bab el-Mandeb.

Brent crude rose about 4% to trade above $98 per barrel, raising concerns over inflation and energy costs.

The spike in oil prices weighed on Indian equities. At around 3:15 p.m., the Sensex was down 400 points, or 0.52%, at 76,355.25, while the Nifty 50 fell 119.70 points, or 0.50%, to 23,876.55, extending losses for a fourth straight session.

Crude-sensitive sectors remained under pressure, with all NSE sectoral indices trading in negative territory except the auto index. The Nifty Smallcap 100 and Nifty Midcap 100 indices also declined 0.57% and 0.58%, respectively.

Red Sea Attacks Raise Supply Concerns

The latest leg of the oil rally followed reports of an attack on a commercial vessel in the Red Sea.

The United Kingdom Maritime Trade Operations (UKMTO) said a vessel was struck around 70 nautical miles southwest of Al Shuqaiq, triggering a fire onboard. The crew was able to battle the blaze and no casualties were reported.

Yemen's Iran-aligned Houthi movement later claimed responsibility, saying it had targeted two Saudi oil tankers — Encelia and Layla — for allegedly violating its maritime blockade.

"We targeted two Saudi oil tankers, named Encelia and Layla, for their violation of the blockade decision issued by the armed forces," Houthi military spokesperson Yahya Saree said.

The Saudi Press Agency (SPA) confirmed that Encelia had been hit, citing an official from Saudi Arabia's Transport General Authority, and said all crew members were safe.

SPA described the attacks as a violation of international law and conventions protecting commercial shipping but did not provide details on the reported attack involving Layla.

Saree said the operation involved ballistic missiles, cruise missiles and drones, adding that the strikes caused fires aboard the targeted vessels.

The attacks have heightened concerns over the safety of commercial shipping through the Red Sea, adding to existing fears that any prolonged disruption across the Strait of Hormuz or Bab el-Mandeb could tighten global oil supplies and keep crude prices elevated.