Yemen's Houthis said they had targeted two Saudi Arabian oil tankers, named Encelia and Layla, with drones and missiles in the Red Sea for allegedly violating their maritime blockade; the group said the attacks occurred Wednesday.
The state-run Saudi Press Agency confirmed the Encelia was targeted while transiting the Red Sea, saying a fire broke out at the bow of the vessel; an unnamed official reported all crew were safe and described the attack as a violation of international law. The agency said the Encelia was set ablaze while sailing overnight and did not mention the Layla.
The United Kingdom Maritime Trade Operations reported that an "unknown projectile" struck a Saudi Arabian oil tanker about 130 kilometers from the coastal town of Al Shuqaiq, causing a fire onboard and reporting no casualties; the U.K. office characterized the area as north of the Bab el-Mandeb Strait.
Observers said the strikes appeared to mark the first time since the Iran war began that ship attacks had spread beyond the vicinity of the Strait of Hormuz.
International oil prices rose sharply after the reports, with Brent crude touching $100.64 a barrel at 10:05 a.m. ET and West Texas Intermediate rising to $91.83, according to FactSet; Brent crossed the $100 mark, and the last time global oil prices settled above $100 was May 22.
U.S. stock indexes fell after the opening bell, with the S&P 500 and the Dow Jones Industrial Average tumbling 1% and the Nasdaq Composite slumping 1.8%.
Economists said the Bab el-Mandeb Strait is a key chokepoint: Oxford Economics estimated the strait carries about 7% of global oil supply, while other observers note roughly 12% to 15% of global maritime trade, worth more than $1 trillion, transits the strait each year.
The surge in oil prices raised questions about U.S. monetary policy ahead of the Federal Reserve's next decision on July 29; CME FedWatch showed a 36% probability the Fed could increase its benchmark rate at that meeting, up from about 11% a week earlier, and Nigel Green, CEO of investment firm deVere Group, said, "Rate cuts investors were counting on for later this year look a lot less certain today than they did even a week ago, and then they were on shaky ground."
U.S. Central Command said American forces completed another round of strikes against Iran, hitting military targets including maritime capabilities, missile and drone storage facilities, and air defense assets, and said the strikes "further degrade Iran's ability to attack civilian mariners and commercial vessels." Centcom said it had redirected nine commercial vessels and disabled one to prevent ships from entering or departing Iranian ports. U.S. officials have also carried out strikes on targets across Iran for 12 consecutive nights, increased the number of refueling aircraft deployed to Israel, and open-source flight-tracking data showed American B-1 bombers leaving the U.K.
Treasury yields rose as oil moved higher, with the 10-year Treasury climbing to 4.71%. Jim Reid, Deutsche Bank's global head of macro research, said, "Inflation has remained top of the agenda for markets this morning," linking the jump in oil to concerns about inflation; the average 30-year U.S. mortgage rate rose to 6.77%, its highest level since July 2025.