Brent hits $89 as Red Sea threat compounds Hormuz disruption
Brent crude swung around $89 a barrel as a near-standstill in Strait of Hormuz traffic was compounded by Houthi threats to Saudi Arabia’s Red Sea export route, tightening global supply buffers.
Brent crude swung around $89 a barrel after a 20% rally this month, as physical disruptions to global oil flows intensified across multiple chokepoints. Traffic through the Strait of Hormuz came to a near standstill on Monday following a 10th consecutive day of US strikes on Iran. Two tankers managed by Dynacom Tankers Management Ltd., including the supertanker Acheloos, were struck in the waterway over the weekend.
The escalating violence has effectively priced standard maritime crews out of the vital transit route. Sinokor Group, the world’s largest owner of supertankers, is now offering seafarers six months’ extra salary to make a return voyage through Hormuz. The extreme risk premiums underscore how severely physical supply chains have been constricted by the conflict following President Donald Trump’s vow that Tehran “will pay” for killing American soldiers.
The supply crisis has now spilled into a secondary chokepoint that markets previously relied on as a workaround. Yemen’s Houthi militants threatened to blockade Saudi maritime traffic in the Red Sea, directly targeting roughly 2.5 million barrels a day of Saudi crude exported from the Yanbu hub, according to Rystad Energy AS senior vice president Jorge Leon. The Saudi Foreign Ministry stated it would take all necessary measures to protect its vessels under international law.
Saudi Arabia typically uses its cross-country pipeline to bypass Hormuz and export crude via the Red Sea, meaning the Houthi threat eliminates a critical logistical safety valve. Combined with separate disruptions at the Caspian Pipeline Consortium terminal on Russia’s Black Sea coast—which handles up to 1.8 million barrels a day of Kazakh exports—the physical market is facing severe strain.
“If there’s a disruption in the infrastructure, particularly the shipping lanes, then that could cause a spike in oil prices,” said Rob Thummel, senior portfolio manager at Tortoise Capital LLC. “Inventories have drawn down a bit, so there’s just not a lot of margin for error.”
Traders are now weighing the probability of sustained price shocks against the potential for a diplomatic de-escalation. Goldman Sachs Group Inc. warned that Brent could exceed $120 a barrel by the fourth quarter if Hormuz disruptions continue, though the bank maintains an $80 base case for the final three months of the year. The emergence of a Houthi threat in the Red Sea adds significant upside risk to those forecasts.
