Brent crude oil jumped 5% on Monday, pushing prices toward $100 a barrel for the first time since May. The surge came after Houthi rebels attacked Saudi tankers in the Red Sea, a key shipping lane for global oil supplies.
Why the Red Sea attacks matter
The Red Sea is a critical chokepoint for oil tankers heading from the Middle East to Europe and beyond. Houthi strikes on Saudi vessels have raised fears of supply disruptions, especially as the group has vowed to intensify attacks. Traders are now pricing in a higher risk premium, which sent Brent futures soaring.
Inflation fears resurface
The jump in oil prices has reignited concerns about inflation. Higher energy costs could ripple through the global economy, pushing up prices for everything from gasoline to manufactured goods. Central banks, already grappling with stubborn inflation, may face renewed pressure to keep interest rates elevated.
The $100 mark is now within sight. Whether it holds depends on how the situation in the Red Sea develops. If attacks continue or escalate, further gains are likely. But any de-escalation or diplomatic breakthrough could quickly reverse the rally. For now, markets are watching closely.
