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The Emirates News Agency reported that Brent crude settled at $105.91 per barrel after a session that saw gains of more than three dollars, reflecting heightened concerns over energy flows from the Persian Gulf. West Texas Intermediate crude followed a similar upward path although the agency did not specify its exact closing level. This movement extends a rally that has seen the benchmark rise more than 50 percent from year-earlier levels according to market assessments.
A Reuters analysis found that crude shipments through the Strait of Hormuz have fallen below two million barrels per day from pre-conflict volumes of eight to nine million as fighting between U.S. and Iranian forces intensified. Iran-backed Houthi militants have targeted Saudi-linked tankers in the Red Sea complicating an alternative export path that had carried roughly four percent of global supply. The combined pressure on these vital arteries has left markets exposed with limited buffers according to trading groups.
International Energy Agency figures show global oil inventories dropped by 69 million barrels in July continuing a pattern of draws that averaged 2.7 million barrels daily. The agency revised its 2026 demand outlook to a decline of 1.6 million barrels per day a downgrade of 510,000 barrels from the previous estimate as higher prices and route closures weigh on consumption. These developments come as the U.S. Strategic Petroleum Reserve sits at its lowest level since 1982 according to government data.
Analysts at RBC Capital Markets described the conflict as having entered a more dangerous phase warning that a wider regional war could lift prices toward $150 a barrel. Morgan Stanley raised its fourth-quarter Brent forecast to an average of $100 while HSBC adjusted its 2026 and 2027 projections to $90 and $85 per barrel respectively. The assessments highlight how low onshore stocks and product market tightness are supporting the rally even as demand softens in some regions.
Brent has gained 13.88 percent over the past month and 52.56 percent from the same time last year according to trading records. Physical benchmarks have moved above $100 with diesel crack spreads reaching record highs in the United States as refiners compete for limited barrels. Vitol chief executive Russell Hardy told an industry conference that Middle East exports had halved to around 10 million barrels per day of crude and products from 20 million before the conflict began.
Goldman Sachs simulated that full closure of Iranian output estimated at 2.6 million barrels per day could push prices beyond $120 a barrel given current inventory conditions. Iranian state media reported strikes near the Kharg Island terminal which historically handles the bulk of the country’s exports. U.S. officials confirmed attempts to target naval assets in the area further elevating risk premiums across the oil complex.
