Back to a "highest since July" oil market

Another month of uncertainty in the Middle East has resulted in another round of wild price swings in the oil market, and often heard quips of Brent and WTI futures having hit their highest since July. That was literally just a month ago. 

US President Donald Trump's latest move is to hit Iran economically. With all else failing to resolve a safe and certain passage of energy (and other) cargoes through the Strait of Hormuz, and major regional exporters like Saudi Arabia and UAE exploring alternative transit routes, focus of the White House has now turned to crippling Iran's economy intertwined with its energy industry via non-military means. 

US Treasury Secretary Scott Bessent described the latest move as "an economic D-Day" and "the single greatest financial offensive ever" - the full details of which will follow over the coming weeks. Given the limited range of options available to bring a swift end to the tension, such a long shot is worth a try, even if the Islamic republic's capacity to ride it out and pass on the hardship to its people is pretty well documented. 

Meanwhile, the oil market is learning to live with the diplomatic deadlock of the past few months following on from the breaking out of hostilities on February 28. It has become a sort of a 'perma-crisis' or a permanent crisis as risk premiums subside only to rise again, and more of the same.

In recent weeks we have seen crude oil cargoes continue to move under the cloud of geopolitical uncertainty largely along the Omani coastline. Various data aggregators indicate the figure may be somewhere in the region of 9-10.5 million barrels per day. Now, even if taken at the upper end of the range, that's still only around half of the volume noted in February. 

As such the domino effect of all this will continue to be felt by the global market with elevated and volatile prices. But that hit is nowhere near the three-figure levels seen at the height of the conflict in March and April. 

Using Brent as a benchmark as the time of The Oilholic posting this blog - oil futures are trading down 0.6% on last week, up 6% on last month, down 3% on the past three-months but up 33% on last year, as trading on daily developments becomes the order of the day. Expect more of the same for now. 

That's all for the moment folks! More market musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

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© Gaurav Sharma 2026. Photo: Oil production site. © Monika Wrangel / Pixabay, May 2015.

Fresh US-Iran tension = higher oil prices. What's next?

Fresh tension in the Middle East, fresh exchange of fire between the US and Iran, a threat from President Donald Trump to impose a 20% charge on transits in the Strait of Hormuz (subsequently retracted), and a fresh US blockade of Iranian ports that has followed since can all only mean one thing - higher oil prices. 

Just when you thought that a normalisation of the crude market was on the horizon, Brent futures had fallen to pre-War pricing levels, and oil glut chatter resurfaced - disruption came glaring back. Versus last week, both Brent and WTI are up by double-digits. That is to be expected when a key maritime artery through which a fifth of the world's oil and LNG transit remains severely disrupted. 

When Iran initially started attacking ships and tankers transiting through the Strait of Hormuz (again) a fortnight ago for using the southern Hormuz corridor in Oman's territorial waters versus its own northern corridor, the idea was perhaps to see what the US response would be, re-assert its authority, and more generally poke Trump as it was. 

Not sure what the Iranians were expecting, other than what's since happened - a overwhelming show of force by US, a reimposition of a blockade on Iranian oil and more turmoil. The big question for the market is not where we are currently at, but rather where is this is going? 

A prolonged disruption can now only lead to one outcome - a diminished importance of the Strait of Hormuz over the medium-term with the rest of the region contemplating alternative pipeline routes, having taken a cue from the UAE and Saudi Arabia.

And for the moment, we'll continue to see elevated - but not out of control - oil prices as the true cost of this latest costly miscalculation is counted. That's all for the moment folks! More market musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

To follow The Oilholic on Twitter click here.

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To email: journalist_gsharma@yahoo.co.uk  

© Gaurav Sharma 2026. Photo: VLCC Kelly moored at the Port of Fujairah, UAE. © Gaurav Sharma, September 2016.