NEW YORK / RankWire.AI / – On July 29, Brent crude prices surpassed the $90 per barrel mark, driven by fears of tighter supplies and renewed conflict in the Middle East. The benchmark closed at $90.74, reflecting a gain of $6.65, or 7.9%, during the trading session. Meanwhile, West Texas Intermediate increased by $5.20, or 6.6%, concluding at $84.46. These were the most significant daily gains for both indices in several weeks. Oil prices also continued their July rally, boosting both contracts by over 20%.
The market faced additional pressure from military activities near major oil production and shipping hubs. U.S. and Saudi forces targeted Iran-backed groups in Iraq following drone strikes on Saudi oil facilities. Reports from Iran indicated attacks on ships near the Strait of Hormuz and U.S. bases in Jordan. During the same period, explosions impacted a natural gas loading site in Egypt. Maritime security firm Ambrey reported damage to a U.S.-owned floating storage tanker at the Egyptian installation.
These hostilities disrupted key transit routes vital to global energy trade. Shipping traffic remained restricted in parts of the Gulf and the Red Sea. The Strait of Hormuz accounts for a significant portion of oil exports from Persian Gulf nations, while the Bab el-Mandeb Strait connects Red Sea shipping lanes with markets in Asia and Europe. Interruptions along these routes impacted cargo schedules and heightened concerns over supply levels. Traders closely monitored damage at energy facilities and transportation infrastructure as well.
U.S. crude reserves experience sharp decline
The rise in crude prices on July 29 was supported by U.S. inventory data. The Energy Information Administration reported a reduction of 7.2 million barrels in commercial oil stocks. Inventories dropped to 404.5 million barrels, marking their lowest point since 2018, excluding crude stored in the Strategic Petroleum Reserve. The data confirmed a substantial weekly decrease in U.S. supplies, coinciding with ongoing market concerns over transportation disruptions, military strikes, and damage near regional energy sites.
However, oil prices plummeted sharply on August 3 after the United States halted another planned strike against Iran. President Donald Trump also announced negotiations aimed at an agreement regarding Iran’s nuclear program and the Strait of Hormuz. During early trading, Brent declined by $4.49, or 5.1%, to $83.44, while West Texas Intermediate fell by $4.90, or 5.8%, to $79.77. This decline erased much of the July 29 gains within just three trading sessions.
OPEC+ approves additional output for September amid price declines
In response to falling prices, OPEC+ sanctioned an increase in oil production for September, raising its output target by approximately 188,000 barrels per day. The move reversed a total of 1.65 million barrels per day in voluntary cuts enacted earlier in 2023. The participating countries include Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman. They also agreed to continue monthly evaluations of the market and compliance levels, with the next review scheduled for September 6.
Despite the August price retracement, Brent and WTI prices remained above their average levels in June. Brent crude averaged $85 a barrel in that month, which is $22 below the May average and $32 below the April 2026 peak. The July energy forecast projected an average Brent price of $82 for 2026. The move past $90 on July 29 was driven by declining U.S. inventories, restricted shipping routes, and active conflicts near key oil and gas infrastructure.