Summary
- Brent up 24% in July, WTI rises 21%
- Two very large crude carriers exit Strait of Hormuz
- Twenty-nine commodity vessels transited Bab el-Mandeb strait on Thursday
- Reuters poll says Brent crude to average $85.22 per barrel in 2026
(Reuters) – Oil prices closed more than $1 per barrel higher on Friday, ending July with their biggest monthly gains since March, as concerns over global crude flows mounted on Iranian reports that some tankers were forced to turn back in the Strait of Hormuz.
Brent futures settled up $1.09, or 1.2%, at $90.12 a barrel, while U.S. West Texas Intermediate (WTI) futures closed up $1.08, or 1.3%, at $84.67 a barrel.
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For July, Brent gained 24% and WTI rose 21%.
The war in Iran, which began on February 28, has sharply curtailed traffic through the Strait of Hormuz, a vital chokepoint that previously carried about a fifth of global crude oil and natural gas supplies, disrupting millions of barrels per day of Middle East output.
Iran has largely blocked shipping through the strait since the conflict began, while its Houthi allies in Yemen this month threatened vessels transiting the Bab el-Mandeb strait at the southern end of the Red Sea, jeopardizing an alternative export route used by Saudi Arabia and other regional producers.
Iran’s Revolutionary Guards stopped two tankers from transiting the Strait of Hormuz, while four others changed course, Fars News Agency reported.
Two very large crude carriers carrying oil loaded from the Gulf exited the strait on Friday, although traffic through the waterway remained sparse, according to Kpler ship-tracking data.
Twenty-nine commodity vessels passed through the Bab el-Mandeb strait on Thursday.
“The market has stopped trading the war and started trading the shipping data,” said Ole Hvalbye, market analyst at SEB Research.
Talks between Iran and Oman on managing the strait continue, according to the Iranian Labour News Agency, despite Tehran’s rejection of Oman’s proposal for joint management of the waterway.
GEOPOLITICAL RISKS REMAIN
Research firm Gelber & Associates wrote in a note that the “geopolitical risk premium (remains) firmly in place near chokepoints like the Strait of Hormuz. Domestic supply is reinforcing the move as well, with U.S. crude stockpiles … down to multi-year lows.”
The note was referring to Energy Information Administration (EIA) data showing U.S. commercial crude stocks last week fell to their lowest levels since 2018.
A drone strike that sparked fires on two gas vessels in Egypt’s Mediterranean port of Damietta also raised threats to shipping through the Suez Canal.
Saudi Arabia this week said it is seeking to lead a coalition to boost defense cooperation in the Bab el-Mandeb strait, the Red Sea and the Gulf of Aden.
Ukraine’s military said it hit Russia’s Volgograd oil refinery overnight on Friday, causing a fire at the facility.
In Kazakhstan, Tengizchevroil, the operator of the giant Tengiz field, has resumed oil exports via the Georgian port of Batumi for the first time since March, two sources told Reuters.
Crude oil output in the U.S. fell about 2% in May from a record high in April, while exports hit a record high for the second consecutive month, according to EIA data on Friday.
Higher oil prices, however, dented consumption, with demand for crude oil and petroleum products falling more than 3.5% in May to about 20.07 million barrels per day, the lowest level since March 2025, the data showed.
A report from Baker Hughes on Friday showed that U.S. energy firms this week added rigs for a sixth time in seven weeks. The number of active rigs is an early indicator of future output.
Separately, a Reuters survey of 31 economists and analysts showed that are expected to rise further this year. Brent crude is estimated to average $85.22 a barrel in 2026, up from June’s forecast of $84.50, the survey showed.
Reporting by Siddharth Cavale in New York, Anushree Mukherjee in Bengaluru and Sudarshan Varadhan; Additional reporting by Ahmad Ghaddar in London; Editing by David Holmes, Rod Nickel and Paul Simao
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