Oil prices rose to $100 (£74) a barrel on Wednesday, after the US and Iran attacked tankers in the Gulf region and Yemen's Houthis hit oil facilities in Saudi Arabia.
Overnight, the US said it struck five Iranian tankers in retaliation for Iran's targeting of a warship, while Iran's Revolutionary Guards said they attacked eight tankers and two warships in response, as well as a US base in Jordan.
The Guards also said they planned a new "prohibited zone" for shipping that extended beyond the Strait of Hormuz into the Arabian Sea.
The Iran-backed Houthis reported dozens of Saudi strikes in Yemen, a day after drone and missile attacks caused fires at several oil facilities in Saudi Arabia.
A very quick guide
Oil
What are the key terms you need to know?
What is crude oil?
Crude oil is a yellowish-black liquid formed over millions of years from decayed organic matter.
It is a vital resource in the global economy because it is used for fuel, including refined products such as petrol, kerosene and diesel, and as a basis for many household goods, such as plastics and clothing.
What is Brent crude?
Brent crude is based on a blend of oils, most of which are produced in the North Sea.
It is one of the most widely used international benchmarks for crude prices globally.
Contracts to buy and sell oil will often use the price of Brent crude as a reference point so its price significantly influences global energy prices.
How is oil measured?
Oil is generally measured in barrels.
One barrel of oil is equal to 159 litres - around 42 US gallons (or 35 UK gallons).
Around half of all oil is used for petrol.
How much oil do we use?
In 2024, 101 million barrels were consumed every day across the world, but the amount used per region varies.
- The US consumes nearly 19 million barrels of oil per day (18.7% of the world’s oil)
- China consumes just over 16 million barrels per day (16.1%)
- Europe consumes just over 14 million barrels per day (14.5%)
- The UK consumes 1.3 million barrels per day (1.3%)
Where is oil found?
Oil reserves are large pockets of oil deep beneath the earth.
These reserves are found all over the world.
The countries with the largest known reserves are Venezuela, Saudi Arabia, Iran, Iraq, Kuwait, the United Arab Emirates (UAE) and the US.
Where does the UK get its oil?
The US was the number one exporter of crude oil to the UK in 2024, followed by Norway.
The escalating conflicts pushed the price of Brent crude, the global benchmark, to its highest level since late July, when Iran and the US resumed hostilities after a one-month lull.
A barrel was priced at $100.70, up 2.83% compared to Tuesday, on Wednesday afternoon.
Before the US and Israel's war with Iran began in February, Brent crude had been priced at about $70 (£52) a barrel.
But Iranian missile and drone attacks on commercial shipping and a US naval blockade of Iranian ports resulted in the effective closure of the Strait of Hormuz waterway in the Gulf, through which 20% of the world's oil and liquefied natural gas (LNG) shipments usually pass.
The Houthis have also been targeting Saudi energy infrastructure and tankers in the Red Sea since July, when a four-year ceasefire in Yemen began unravelling.
The rising oil costs have sparked leaps in petrol prices around the world for motorists.
The US military's Central Command (Centcom) said early on Wednesday that its latest strikes destroyed four Iranian oil tankers linked to Iran's Islamic Revolution Guard Corps (IRGC) in the Gulf of Oman - Kaviz, Charminar, Horizon 1 and Riesco - and a fifth tanker - Derya - near Kharg Island, in the northern Gulf, which hosts Iran's main terminal for exporting oil.
US forces directed the crews to abandon ship before the vessels were struck, it added.
Centcom said the attacks came after the IRGC launched ballistic missiles at a US warship in the region twice in two days. It added that the warship "successfully evaded" the missiles and that no American troops were harmed.
The IRGC said its Aerospace Force launched missiles at US maintenance facilities, hangars and aircraft at Muwaffaq Salti Air Base in Jordan overnight in retaliation for the US strikes.
Jordan's armed forces said they intercepted 20 Iranian missiles and two others fell in unpopulated areas, with no casualties were reported.
Later, the IRGC said its navy also attacked two US Navy destroyers and eight oil tankers in the Strait of Hormuz, causing "heavy damage" to the vessels.
Centcom said the claim that the IRGC struck two of its warships was false.
The UK Maritime Trade Operations agency said it had received reports of several merchant vessels in the northern Gulf and the Gulf of Oman being "subject to disabling fire as part of ongoing military activity in the region".
It also reported that one vessel 24 nautical miles (45km) north-west of Port Rashid, in the United Arab Emirates, was seen "listing while at anchor, possibly indicating water ingress following an attack from an unknown projectile".
Iraqi authorities said they extinguished a fire on a Panama-flagged tanker, New Andros, that was carrying two million barrels of fuel oil when it was hit by a drone in the Gulf.
On Wednesday afternoon, IRGC spokesman Hossein Mohebi told Iranian state TV that it would soon announce the co-ordinates for a new "prohibited zone" covering "part of the Sea of Oman and another part of the Arabian Sea, along the route that can lead to the Strait of Hormuz".
"If a vessel enters that area without co-ordination, it will be subject to our sanctions," he said.
When asked by reporters about the latest tit-for-tat strikes, US Secretary of State Marco Rubio said on Tuesday that the situation was "pretty straightforward".
"Iran continues to try to hit US naval ships. And, for every time they do that or try to do that, they're going to lose tankers. And I think you'll see that again today," Rubio told reporters during a trip to Colombia.
The US strikes on Tuesday came hours after Iran's Navy said it had seized an uncrewed US submarine in the Strait of Hormuz.
US Navy Capt Tim Hawkins, a spokesperson for Centcom, said an "underwater drone operated by US forces malfunctioned more than a day ago" and that it had been used to survey regional waters.
Saudi Arabia and the Houthis, an Iran-backed group that controls much of north-western Yemen, have also been exchanging fire.
Following a wave of air strikes on Sunday and Monday, the Houthis accused Saudi Arabia of bombing a prison in Hazm. The group's military spokesman Yahya Sarea said on Wednesday that the bodies of 23 civilians had so far been pulled from the rubble.
On Tuesday, the Houthis launched dozens of drones and missiles at civilian and economic sites in the southern Saudi cities of Abha, Khamis Mushait, Jazan and Najran, injuring 73 civilians, according to Saudi authorities.
The attacks caused fires at oil facilities that led to a temporary halt in operations, they said.
On Wednesday, the Houthis reported more than 50 Saudi air strikes across territory they control in the provinces of Marib, Jawf, Taiz, Hudaydah, Saada and Bayda.
There was no immediate comment from the Saudi military.
There has also been heavy fighting on Yemen's south-western coast since Thursday, when the Houthis launched an offensive against Saudi-backed Yemeni pro-government forces in a bid to take control of the Bab al-Mandab Strait, which connects the Red Sea to the Gulf of Aden.
More than 500 people have reportedly been killed and almost 20,000 displaced.
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