Oil Hits Six-Week High as Hormuz and Bab el-Mandeb Risks Spark Global Supply Crisis

Escalating hostilities in the Middle East and mounting security risks at critical oil transit chokepoints have propelled crude prices to their highest level in six weeks, signaling a severe bottleneck in global supply chains. As conflict intensifies between the U.S. and Iran, and new threats from Houthi militias target maritime traffic, markets are bracing for potential supply disruptions.

Supply Bottleneck Deepens: Prices and Time Spreads

Market anxiety is clearly reflected in futures pricing, with a sharp rise in Brent and WTI barrel prices deepening a 'backwardation' structure where prompt delivery commands a significant premium.

■Brent crude settled up $3.06 (3.36%) at $94.07 a barrel, marking the highest close since June 11, after hitting a session high of $95.47.

■U.S. West Texas Intermediate (WTI) crude climbed $2.49 (2.95%) to settle at $86.83.

■The Brent three-month timespread widened to $9.26 a barrel, its widest since May 22, signaling tightening near-term supply and deepening backwardation.

Front Widens: Houthi Red Sea Blockade

The conflict is expanding beyond the Strait of Hormuz to the Bab el-Mandeb Strait. Threats by Houthi militias to target Saudi oil shipments and a declared naval blockade are reshaping tanker traffic in the region.

■Iran's Revolutionary Guards warned shipping companies that the southern route of the Strait of Hormuz is mined.

■President Donald Trump stated the U.S. would "bomb and destroy one bridge or power plant" if Tehran targets a ship in the Strait of Hormuz.

■The European Union's naval force Aspides advised vessels linked to Israel, the U.S., or Saudi Arabia to avoid voyages through the Red Sea and Gulf of Aden due to higher attack risks.

■In response to Houthi threats, five tankers altered course in the Red Sea to avoid the Bab el-Mandeb Strait on Wednesday.

Captain Rıza Deniz Note: Markets are currently facing an unprecedented 'dual-strait risk.' While the mine threat in the Strait of Hormuz is already driving up freight insurance premiums and transit times, the new front at Bab el-Mandeb forces Saudi oil exports onto alternative routes. This situation points to capacity constraints that will lift the Baltic Dry Index (BDI) and herald a new energy-cost-driven shock in global inflation figures. As tankers divert, transit times lengthen, and inventory costs inevitably pass through to consumers.