Brent crude flirts with $100 as Houthi strikes on Saudi oil facilities escalate conflict

Crude oil prices climbed toward $100 a barrel this week as attacks on Saudi energy infrastructure intensified the Middle East conflict, while the Japanese yen surged to a seven-month high on mounting expectations of Bank of Japan policy tightening — a dual shock rippling through global markets.

Oil Prices Surge on Houthi Strikes

Brent crude settled at $97.92 a barrel on Tuesday after Iran-backed Houthi rebels struck oil facilities and an airbase across five Saudi cities, injuring more than 70 people and temporarily shutting down some Aramco installations in the south. The U.S. benchmark West Texas Intermediate settled at $93.03, up 1.7% on the day.san+1

The attacks came after U.S. strikes on Iranian tankers near Kharg Island earlier in the week pushed oil to six-week highs, with Iran vowing to retaliate against energy infrastructure across the region. Brent crude came within reach of the $99.71 high set on July 24, when U.S. and Israeli strikes on Iran last sent prices flirting with triple digits. WTI had already risen 9.7% the prior week on the broadening conflict.seekingalpha+3

Shipping through the Strait of Hormuz has slowed, and analysts warn Persian Gulf oil supplies could remain constrained through the rest of 2026. The national average for regular gasoline in the United States has climbed to $4.15 per gallon, according to AAA.tbsnews+1

Yen Short Squeeze Unwinds Carry Trades

In currency markets, the yen surged to a near seven-month high as traders reassessed the currency's outlook, driven by expectations of faster Bank of Japan tightening and growing bets that Japanese investors could repatriate funds, according to Reuters. USD/JPY fell as low as ¥152.88 during early Asian trading on Tuesday, breaching levels reached during Japan's July intervention and forcing a rapid unwind of carry trade positions.fxstreet+1

The move had more to do with rising BoJ rate hike expectations than with direct intervention, as no official confirmation of government action has surfaced. U.S. Treasury Secretary Scott Bessent has taken an unusually hands-on approach to currency and bond markets, though improving Japanese fundamentals appear to be doing much of the work. Japan's Treasury holdings have dipped below $1 trillion as Tokyo opted to sell rather than tap a Fed borrowing facility Bessent had proposed.fxstreet

Markets Look Ahead to Inflation Data and the Fed

The S&P 500 closed lower on Tuesday, with technology stocks leading the decline while energy names gained on the oil rally. Attention now turns to the European Central Bank's rate decision on Thursday and U.S. inflation data — August PPI on Thursday and CPI on Friday — ahead of next week's Federal Reserve meeting. Interest rate swaps suggest roughly a 50% chance the Fed raises rates, with about 35 basis points of total tightening priced in by year-end.fxstreet