Iran-Backed Houthis Launched a Large-Scale Attack Against Saudi Arabia. Oil Is Nearing $100 Again.

Oil prices are climbing again on Tuesday after Iran-backed Houthi rebels launched a large-scale attack against Saudi Arabia.

Brent crude, the international benchmark, gained 1.69% and clocked in at $98.64 per barrel at 7:43 a.m. ET, while West Texas Intermediate, the U.S. benchmark, did so 2.56% and stood at $93.82 at the same time.

The Houthis said they attacked four cities and oil facilities south of Riyahd, specifically targeting the Khamis Mushait airbase and assets belonging to state-owned oil company Aramco.

Saudi authorities confirmed the attack, saying over 70 people, including women and children, had been wounded. Its forces then retaliated with air strikes east of Yemen's capital, Sanaa, which is controlled by the Houthis.

The rebal group supported by Iran has also declared a maritime embargo of Saudi oil and has been seeking to prevent its ships from transiting through the Red Sea for weeks. As a result, Riyadh is dramatically increasing oil exports through Egypt and the Mediterranean.

Oil exports from Egypt's Mediterranean port of Sidi Kerir more than doubled in August, reaching about 2.3 million barrels per day compared with roughly 1 million bpd in July, according to Kpler data cited by CNBC. The majority of those barrels are Saudi crude, signaling what analysts say is a significant shift in Riyadh's export strategy.

Saudi crude flows are increasingly moving north through Egypt's SUMED pipeline as tankers seek to avoid the Bab el-Mandeb Strait. Crude loadings at Sidi Kerir had climbed to a record 2.17 million bpd, with roughly 90% consisting of Saudi crude.

The SUMED pipeline connects Ain Sokhna on Egypt's Red Sea coast with Sidi Kerir on the Mediterranean. The route is particularly important for fully loaded Very Large Crude Carriers, or VLCCs, which cannot simply make the entire Suez Canal transit with their full cargo.

The Houthi attacks also took place shortly after the U.S. military struck three Iranian tankers in retaliation for missiles launched against its Navy. Tehran claimed the attacks were a "war crime" and an act of "economic warfare."

Iran has also shifted its missile strategy to one where it will also launch preemptive strikes.

"We have changed our military doctrine toward preemptive operations," said army spokesman Mohammad Akraminia said last week. He added that the latest operation was part of the new approach, according to Iran International.

The official went on to say that U.S. air-defense systems in the region have been damaged, and that will make it easier for Tehran to target Israel.