Oil prices ended at their highest level since Wednesday June 11, as supply risks grow. The rise in the sudden jump is driven mainly by the escalation of tensions between the United States and Iran, and a fresh threat to commercial shipping from the Houthi militia in Yemen, backed by Iran.

The price of Brent crude futures rose by $3.06, or 3.36%, to $94.07 a barrel, its highest level of the session, in the London trading session. The three-month timespread of Brent crude also widened to $9.26 per barrel, the biggest since May 22. This further exacerbates the backwardation in the market, meaning that forward crude prices are lower than current prices, usually indicating reduced near-term supply.

Heightened Supply Risks in Key Waterways

The U.S. military launched an 11th night in a row against Iranian military targets, said U.S. Central Command. The strikes came just hours after Kuwaiti military forces declared that their air defence system neutralized Iranian drones. The escalation of the conflict prompted President Donald Trump to say the U.S. would strike key Iranian infrastructure, including bridges or power plants, anytime Tehran strikes against a ship in the Strait of Hormuz.

In response, the Revolutionary Guards of Iran, warning shipping companies on social media, said that the southern route of the Strait of Hormuz is now mined. The Iran-backed Houthis are also threatening to attack ships transporting Saudi oil through the Bab el-Mandeb Strait, extending their new campaign beyond this important waterway and effectively saying they are blocking Saudi Arabia’s waters.

The European Union’s naval force Aspides strongly recommended to ships under Israeli, American or Saudi flag to avoid travelling through the Red Sea and the Gulf of Aden because of high risk of attack. The Bab el-Mandeb Strait is becoming more dangerous, and energy analysts say the market now has a big “dual-strait worry.

At least five tankers in the Red Sea turned their course after the Houthis’ warning issued on Wednesday. Asian refiners are looking for more opportunities to move crude oil through Saudi Arabia’s Red Sea port of Yanbu via the Suez Canal and around Africa. These involuntary diversions are likely to continue driving down prices in the physical market and on Saudi exports, analysts say, adding to further price increases in the rest of the world.

In the meantime, domestic U.S. crude stocks unexpectedly increased last week. Crude inventories increased 2 million barrels, to 411.7 million barrels, compared with 1.1 million barrel analyst estimates, according to the Energy Information Administration. This was a result of a decline in refinery runs, in crude exports and in imports.

Meanwhile, in other international news, the E.U. ambassadors did not reach an accord on a 21st round of sanctions against Russia over its continued invasion of Ukraine, thus maintaining the geopolitical uncertainties on the global stage.