President Trump Warns of Major Military Response Against Iran Over Houthi Red Sea Strikes

President Donald Trump announced that the United States will hold Iran accountable for the Houthi attacks and warned that both Iran and its Houthi allies could face a significant military response, according to a Reuters report on Thursday.

His comments followed strikes by Yemen’s Iran‑aligned Houthi rebels on two Saudi oil tankers in the Red Sea, widening the regional conflict to a second vital maritime chokepoint.

Earlier in the week, the Houthis declared they were instituting a naval blockade against Saudi Arabia, forcing the kingdom to reroute millions of barrels of oil daily via pipelines to the Red Sea to bypass Iran’s blockade of Gulf oil exports through the Strait of Hormuz.

Market reaction

Market reaction: Crude oil prices edged higher on the news. As of the latest update, West Texas Intermediate (WTI) rose 5.65% to $90.77 per barrel, while Brent crude gained more than 6%, pushing above the $100‑per‑barrel mark for the first time since May.

Brent Crude Oil FAQs

Brent Crude Oil is a type of Crude Oil found in the North Sea that is used as a benchmark for international Oil prices. It is considered ‘light’ and ‘sweet’ because of its high gravity and low sulfur content, making it easier to refine into gasoline and other high-value products. Brent Crude Oil serves as a reference price for approximately two-thirds of the world’s internationally traded Oil supplies. Its popularity rests on its availability and stability: the North Sea region has well-established infrastructure for Oil production and transportation, ensuring a reliable and consistent supply.

Like all assets supply and demand are the key drivers of Brent Crude Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of Brent Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.

The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of Brent Crude Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.

OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact Brent Crude Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.

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