Oil prices five-week high territory was confirmed Tuesday as Brent crude climbed to $91.11 a barrel and West Texas Intermediate surged to $85.30, after a fresh exchange of attacks between the United States and Iran and a new Houthi threat to blockade Saudi Arabia’s coastline sent traders scrambling to price in the risk of a wider Middle East supply shock. Brent was up 2.12% and WTI gained 2.49% in London trading as of early afternoon, marking the strongest levels for both benchmarks in roughly five weeks, since prices last traded near this range in mid-June before a brief ceasefire cooled the market.

The rally caps a volatile month for crude. Prices have climbed close to 20% since the start of July as fighting between Washington and Tehran has sharply escalated again, unwinding much of the relief markets had priced in after a mid-June memorandum of understanding between the two countries had briefly reopened shipping through the Strait of Hormuz.

Brent and WTI Surge as Military Escalation Deepens

The latest price surge follows what analysts describe as the most serious escalation in the U.S.-Iran conflict since a fragile memorandum of understanding was signed in mid-June. American forces have carried out strikes against Iranian targets for nine consecutive nights, according to Reuters, reversing the de-escalation that had briefly pushed Brent below $72 a barrel earlier this month. Iran, for its part, has continued to target shipping and infrastructure in the Gulf, keeping insurance costs and freight rates elevated for tankers attempting to transit the region.

Monday’s session alone saw Brent settle around $89.22 a barrel, up roughly 1.3%, while WTI advanced to about $83.23. Both benchmarks extended those gains into Tuesday trading, with Brent briefly touching $91.42 over the weekend before easing slightly, and WTI reaching its highest level since June 12 at $85.39 before retreating.

Houthi Naval Blockade Threat Adds New Risk to Saudi Exports

Compounding the market’s unease is Monday’s announcement from Yemen’s Iran-aligned Houthi movement that it intends to impose a naval blockade on Saudi Arabia, opening what analysts warn could become an entirely new front in the conflict — one that threatens global energy supplies and trade routes well beyond the Gulf itself.

The threat carries particular weight because Saudi Arabia has spent recent months rerouting millions of barrels of crude away from the Strait of Hormuz and through a pipeline to its Red Sea export terminal at Yanbu, a workaround that has served as a critical release valve for the global crude market throughout the broader U.S.-Iran war. Any disruption to that route would remove one of the few remaining buffers keeping oil supply from tightening further.

“They raise the risk of disruption to another major oil exporter.”— Tim Waterer, Chief Market Analyst, KCM Trade

Shipping data reviewed by Reuters and sourced from LSEG showed at least two oil tankers that had loaded Saudi crude bound for China and India this week abruptly reversed course in the Red Sea, turning back toward the Suez Canal rather than risk transiting waters newly threatened by the Houthis. The maneuver illustrates how quickly commercial shipping is already adjusting to the new threat, even before any blockade has been formally enforced.

Trump Vows Retaliation After US Service Member Deaths

The renewed military escalation follows the deaths of three American service members, which President Donald Trump addressed directly in a post on Truth Social Monday, warning Tehran of severe consequences for future attacks on U.S. personnel.

“They will pay for that killing many times over.”— President Donald Trump, via Truth Social

Trump added that the directive had been passed to Secretary of War Pete Hegseth and Joint Chiefs of Staff Chairman Daniel Caine, along with every military leader involved in the campaign, signaling that Washington intends to expand rather than de-escalate its response. The remarks come just weeks after the U.S. and Iran had signed a memorandum of understanding intended to end hostilities and reopen the Strait of Hormuz to normal shipping traffic.

Why Oil Prices Hit a Five-Week High This Week

Markets had spent the back half of June and early July pricing out much of the war-risk premium built into crude following the mid-June ceasefire, with Brent sliding as low as $71.79 a barrel and analysts at Citigroup even forecasting a drop toward $60 by year’s end as shipping through Hormuz normalized. That view has now been upended. The combination of renewed U.S. strikes, Iranian retaliation, and the Houthi blockade threat has reintroduced the same geopolitical risk premium that drove Brent above $100 a barrel earlier this year, pushing both benchmarks to their strongest levels in five weeks.

Inventory data is adding a secondary layer of tightness to the picture. U.S. commercial crude stocks stood at roughly 409.7 million barrels for the week ended July 10, still below the five-year seasonal average, while the Strategic Petroleum Reserve has fallen to its lowest level since April 1983 after being drawn down repeatedly to cushion earlier phases of the conflict. A preliminary Reuters poll of analysts pointed to further declines in commercial crude and gasoline stockpiles for the most recent week, even as distillate supplies were expected to have risen modestly.

Strait of Hormuz Remains the Key Chokepoint

Underpinning all of this week’s price action is the enduring vulnerability of the Strait of Hormuz, the narrow waterway between Iran and Oman through which roughly a fifth of the world’s seaborne oil trade normally flows. Iran has repeatedly used the threat of disrupting traffic through the strait as leverage during the broader conflict, and the mid-June memorandum of understanding that briefly calmed markets was explicitly built around reopening it to normal shipping.

That agreement now looks increasingly fragile. Renewed U.S. strikes and Iranian counterattacks have already forced some tankers to alter routes, and the Houthi blockade threat against Saudi Arabia introduces a second potential chokepoint far from Hormuz itself, near the Bab el-Mandeb Strait connecting the Red Sea to global markets — a route the Houthis have threatened to close before.

What Happens Next for Global Energy Markets

Traders and analysts will be watching two things closely in the days ahead: whether the Houthi blockade threat translates into actual interference with tankers calling at Saudi ports, and whether Washington and Tehran take any further steps to restore the collapsing memorandum of understanding. Neither outcome looks assured. For now, the market is treating the risk of a wider supply shock as real enough to justify the sharpest price gains crude has seen in five weeks, and further volatility appears likely as long as both fronts of the conflict remain active.

According to Reuters’ latest market coverage, traders are also weighing upcoming U.S. inventory data due later this week, which could add further direction to prices depending on whether stockpile draws confirm the tightening supply picture analysts are already pricing in.