Brent rose 24% and WTI 21% in July, recording their strongest monthly performance since March
Oil prices surged more than $1 a barrel on Friday, ending July with their biggest monthly gains since March. This surge came amid rising concerns about global crude oil flows.
Brent futures rose $1.09, or 1.2%, to $90.12 a barrel, while WTI futures rose $1.08, or 1.3%, to $84.67 a barrel.
In July, Brent crude gained 24% and WTI crude gained 21%.
The war with Iran, which began on February 28, has significantly restricted traffic through the Strait of Hormuz, a vital transit point previously carrying about a fifth of global crude oil and natural gas supplies, disrupting millions of barrels of daily production from the Middle East.
Iran has largely blocked ship passage through the strait since the start of the conflict; Houthi allies in Yemen threatened ships passing through the Bab el-Mandeb Strait in the southern Red Sea this month, jeopardizing an alternative export route used by Saudi Arabia and other regional producers.
Ship traffic became less frequent and sometimes came to a standstill. War news is no longer driving the market; shipping data has become more decisive.
Despite Tehran rejecting Oman's proposal for joint management of the waterway, talks continue between Iran and Oman regarding the management of the Strait of Hormuz.
Nevertheless, the geopolitical risk premium remains firmly in place near bottlenecks like the Strait of Hormuz.
US supply also reinforces this data, with US crude oil inventories falling to their lowest levels in many years. Data from the Energy Information Administration (EIA) showed that US commercial crude oil inventories fell last week to their lowest levels since 2018.
A drone strike that set fire to two gas tankers in the Egyptian Mediterranean port of Damietta also increased threats to shipments through the Suez Canal.
Saudi Arabia said this week it aims to lead a coalition to increase defense cooperation in the Bab el-Mandeb Strait, the Red Sea and the Gulf of Aden.
The Ukrainian military announced Friday night that Russia had attacked its Volgograd oil refinery, causing a fire at the facility.
In Kazakhstan, Tengizchevroil, the operator of the giant Tengiz field, resumed oil exports via the Georgian port of Batumi for the first time since March.
According to data from the US Energy Information Administration (EIA), US crude oil production fell by about 2% in May from its record high in April, while exports reached a record high for the second consecutive month.
However, high oil prices have reduced consumption; Demand for crude oil and petroleum products fell more than 3.5% in May to approximately 20.07 million barrels per day, the lowest level since March 2025.
According to Baker Hughes, U.S. energy companies increased their drilling rigs for a sixth time in seven weeks. The number of active drilling rigs is an early indicator of future production.
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