Key keywords: U.S. WTI crude oil, Brent crude oil, Red Sea tanker attacks, Saudi Arabia offshore attacks, oil supply disruption, Middle East geopolitical risk, global energy inflation, OPEC+ production cuts On August 21, 2024, two commercial oil tankers carrying a combined 2 million barrels of crude oil were struck by explosive drones in international waters 50 nautical miles off the coast of Jizan, Saudi Arabia, near the southern mouth of the Red Sea. No fatalities were reported among the crew, but both vessels sustained significant hull damage and were forced to anchor for emergency repairs, halting their scheduled deliveries to European and Asian markets. Immediately following the incident, global oil prices surged in early Asian trading, with U.S. West Texas Intermediate (WTI) crude climbing 3.2% to top $90 per barrel for the first time since November 2023, while international benchmark Brent crude rose 2.8% to settle above $98 per barrel, edging closer to the psychologically important $100 threshold. The latest price rally comes on the back of months of tight global supply, driven by OPEC+’s extended voluntary production cuts of 2.2 million barrels per day through the end of 2024, as well as stronger-than-expected global manufacturing demand in the first half of the year. The tanker attacks have amplified market anxiety about potential disruptions to one of the world’s busiest energy shipping corridors, where roughly 10% of global seaborne oil trade passes through the Red Sea and adjacent Bab el-Mandeb strait each year. Major shipping operators including Maersk Tankers and Shell have already announced temporary suspensions of all transit through the southern Red Sea, opting to reroute vessels around the Cape of Good Hope, a detour that adds up to 14 days of travel time and increases per-voyage fuel costs by an estimated 30% to 40%. Saudi Arabia’s energy ministry issued a statement condemning the attacks, noting that the country has increased patrols of its offshore territorial waters and is working with regional and international partners to secure commercial shipping lanes. U.S. government officials have also confirmed that they are monitoring the situation closely, and that a release of oil from the U.S. Strategic Petroleum Reserve (SPR) remains on the table as a potential tool to mitigate excessive price spikes. Market analysts from Goldman Sachs have warned that if shipping disruptions last for more than 30 days, Brent crude could surpass $105 per barrel by the end of the third quarter, which would translate to a 15-cent increase in average U.S. gasoline prices per gallon and add 0.3 percentage points to global headline inflation in the fourth quarter.