The spread of the Middle East war to Yemen and Saudi Arabia threatens to worsen the global energy supply shortage caused since the United States and Israel attacked Iran in February.
Global crude prices eased slightly on Thursday but remain well above $100 a barrel after shooting to the highest levels since May. The cost of fuel for consumers has risen even more sharply, with the average retail price for diesel in the United States setting a new all-time record on Thursday just shy of $6.40 a gallon.
U.S. President Donald Trump has so far rebuffed pleas from the Saudis for military support fighting the Houthis, who agreed a ceasefire with the United States last year after Washington bombed the group for two months.
"Well, hopefully we are towards the end of the war," Trump told reporters on Wednesday. He said the Iranians "want to make a deal. We'll see how that works out."
No negotiations between the United States and Iran to end the war have been held since an interim agreement reached in June collapsed within weeks.
The U.S. Navy is trying to guide ships through the Strait of Hormuz, the outlet to the Gulf along Iran's coast, where a fifth of global oil and liquefied natural gas passed before the war, and is also imposing a blockade of Iranian ports.
Iran says the strait is closed and will remain shut until Washington lifts the blockade. It is seeking an agreement with neighbouring Gulf states that would let it collect fees from ships passing through the strait.
War in Yemen and attacks on Saudi Arabia have jeopardised the main alternative route for Gulf oil, with the Houthis capturing the Red Sea coast and islands inside the Bab el-Mandeb, or "Gate of Tears", the strait at its mouth.
Saudi Arabia's East-West Pipeline, which allowed it to pump oil across the Arabian Peninsula and ship it from the Red Sea, has been shut since it was struck last week in an attack Riyadh said came from Iraq, where Iran-backed militias also operate.
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