NEW YORK / RankWire.AI / – Oil prices surged significantly on July 29, with Brent crude closing above $90 a barrel amid escalating supply worries. Brent settled at $90.74, increasing by $6.65, or 7.9%, marking its most substantial daily gain in recent weeks. West Texas Intermediate rose by $5.20, or 6.6%, ending at $84.46. This movement built on a July rally that pushed both benchmarks up by more than 20%. Declining U.S. inventories and disturbances near key Middle East shipping routes supported the upward trend.
Tensions near vital energy infrastructure added upward pressure on global crude markets. U.S. and Saudi military forces targeted Iran-backed groups in Iraq following drone strikes on Saudi oil facilities. Iran also reported attacks on vessels near the Strait of Hormuz and on U.S. military bases in Jordan. During the same timeframe, explosions hit a natural gas loading port in Egypt. Maritime security firm Ambrey reported that a drone damaged a U.S.-owned floating storage tanker at the port. Regional transportation restrictions persisted throughout the week.
Delays in commercial shipping occurred across sections of the Gulf and Red Sea. The Strait of Hormuz facilitates a significant portion of Persian Gulf oil exports to global markets. Meanwhile, the Bab el-Mandeb Strait connects Red Sea routes with Asian and European markets. Reduced vessel traffic disrupted cargo schedules and limited access to several crucial transit pathways. Simultaneously, energy markets kept an eye on damages at production, storage, and export sites. These disruptions coincided with tighter U.S. crude supplies and heightened demand for readily available barrels.
U.S. crude inventories hit 2018 lows
Energy Information Administration reported a decline of 7.2 million barrels in U.S. commercial crude inventories. Stocks fell to 404.5 million barrels, the lowest total since 2018. This figure excludes crude held in the Strategic Petroleum Reserve. The weekly decrease signaled a sharp drop in domestic supplies, aligning with the renewed regional attacks during the same trading session. Following the inventory data, both Brent crude and WTI surged, confirming the larger-than-expected drawdown in commercial stockpiles.
On August 3, oil prices retraced part of their rally after the United States paused another planned strike against Iran. President Donald Trump also announced efforts to reach an agreement concerning Iran’s nuclear program and the Strait of Hormuz. During early trading, Brent fell $4.49, or 5.1%, to $83.44, while West Texas Intermediate declined by $4.90, or 5.8%, to $79.77. This correction erased much of the July 29 gains within three trading sessions, although both benchmarks remained above their June averages.
OPEC+ authorizes increased oil output for September
OPEC+ approved a production increase of approximately 188,000 barrels daily for September. This move reversed 1.65 million barrels per day of voluntary cuts enacted earlier in 2023. The decision involved Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman. The group stated it would continue monthly assessments of market developments and compliance levels. The next review is scheduled for September 6. The decision followed several weeks of volatile price swings across global crude markets.
Brent spot crude averaged $85 a barrel in June, based on the latest U.S. energy forecast available at that time. This average was $22 lower than in May and $32 below the April 2026 peak. The same outlook projected the average Brent price for 2026 at $82 a barrel. Despite the fluctuations, both Brent and WTI recorded gains exceeding 20% during July. The surge past $90 on July 29 was driven by declining U.S. inventories, constrained shipping routes, and ongoing conflicts near critical oil and gas facilities.