Crude oil prices jump over 2 per cent to USD 96 amid escalating West Asia tensions

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Global crude oil prices surged more than 2 per cent on Thursday, with Brent crude climbing above USD 96 a barrel after Iran-backed Houthi militants claimed responsibility for attacks on two Saudi Arabian oil tankers in the Red Sea, raising concerns over global supply disruptions.

International oil benchmark Brent crude rose 2.5 per cent or USD 2.42 to trade above USD 96 a barrel, building on its six-week high from the previous session.

Similarly, US benchmark West Texas Intermediate (WTI) surged over 2 per cent or USD 1.84, hovering near $88 a barrel.

The Houthis said they had targeted the Saudi oil tankers Encelia and Layla using missiles and drones, alleging that the vessels had breached a blockade imposed by the group.

Earlier, the UK Maritime Trade Operations (UKMTO) reported that a commercial vessel had been struck by a projectile off Saudi Arabia's Red Sea coast near Al Shuqaiq, sparking a fire onboard. However, the agency did not identify the ship involved.

The reported strikes are seen as a major escalation in the conflict, marking the first direct attacks on oil tankers operating in the Red Sea.

The waterway has become an increasingly important export route for Saudi Arabia, allowing crude shipments to bypass the Strait of Hormuz -- one of the world's busiest oil transit corridors.

The fresh attacks have added to fears of tighter global oil supplies, extending a rally that has already pushed Brent crude nearly 30 per cent higher this month.

Analysts have warned that oil prices could return to the USD 100-per-barrel mark if geopolitical tensions continue to escalate and supply disruptions intensify.

According to them, the latest attacks have aggravated the West Asia conflict and pushed Brent crude above USD 95 per barrel, a level that could negatively impact market sentiment in India.

They said the dependence on imported crude makes elevated oil prices a key macroeconomic risk, with the potential to pressure inflation and external balances.

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