Brent crude rose above $98 a barrel on Monday, the highest level since 24 July, as market participants priced in heightened supply risk from the Middle‑East conflict. The price surge follows reports that Yemen’s Iran‑aligned Houthis attacked Saudi energy infrastructure, including facilities in the city of Jizan where one of Saudi Aramco’s largest refineries is located. Saudi authorities said operations at some facilities were halted and more than 70 people were injured.
Iran’s Supreme National Security Council warned it could establish a restricted maritime zone in the Gulf if the United States continues what it called "economic warfare" against Tehran. Such a zone could further impede efforts to reopen the Strait of Hormuz, a key oil transit chokepoint. Shipping traffic through the strait fell to seven commodity vessels on Monday, down from eight the day before and far below the pre‑war average of about 130 ships per day.
Higher oil prices are adding to inflationary pressures worldwide, a concern for central banks. In London, the Bank of England held its policy rate at 3.75% and will face questioning from MPs about the inflation impact of the conflict and the role of emerging technologies in the economy. Meanwhile, German export data showed a 0.8% decline in July, underscoring broader economic vulnerabilities linked to rising energy costs.
Analysts note that while energy producers may benefit from higher crude prices, fuel‑sensitive sectors such as airlines, industrial manufacturers and retailers could see margins squeezed as transportation and production costs rise.
