NEW YORK / RankWire.AI / – On July 29, oil prices surged past $90 a barrel, driven by concerns over supply constraints and ongoing conflicts in the Middle East. Brent crude concluded the day at $90.74, reflecting a gain of $6.65, or 7.9%, during trading hours. Meanwhile, West Texas Intermediate increased by $5.20, or 6.6%, ending at $84.46. These increases marked the most substantial daily gains for both benchmarks in several weeks. Oil prices also extended their July rally, which pushed both contracts higher by more than 20%.
The market was further influenced by military operations near crucial production and shipping hubs. U.S. and Saudi forces targeted Iran-backed groups in Iraq following drone attacks on Saudi oil facilities. Iran also reported assaults on ships near the Strait of Hormuz and on U.S. military bases in Jordan. During this period, explosions damaged a natural gas loading site in Egypt, with maritime security firm Ambrey reporting damage to a U.S.-owned floating storage tanker at the Egyptian installation.
Such hostilities disrupted traffic along vital routes used by global energy providers. Commercial shipping remained restricted in parts of the Gulf and the Red Sea. The Strait of Hormuz, which handles a significant portion of oil exports from Persian Gulf producers, and the Bab el-Mandeb Strait, connecting Red Sea shipping lanes with Asian and European markets, faced delays, impacting cargo schedules and escalating supply pressures. Traders also monitored damage near energy facilities and transportation infrastructure.
U.S. Crude Inventories Drop Significantly
The rise in crude prices on July 29 was supported by a decline in U.S. inventories. The Energy Information Administration reported a reduction of 7.2 million barrels in commercial oil stocks, bringing total stocks down to 404.5 million barrels—the lowest level since 2018. These figures exclude crude held in the Strategic Petroleum Reserve. The data pointed to a notable weekly decrease in U.S. supply, amid ongoing concerns about transportation disruptions, military strikes, and damages near regional energy sites.
However, on August 3, oil prices tumbled sharply after the United States announced a pause on another planned strike against Iran. President Donald Trump also revealed efforts to negotiate agreements regarding Iran’s nuclear activities 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 decrease essentially erased much of the July 29 gains within just three trading sessions.
OPEC+ Approves Additional Output Increase for September
As prices declined in August, OPEC+ decided to boost production again for September, raising its target by approximately 188,000 barrels per day. This move marked the end of the 1.65 million barrels per day voluntary cutbacks implemented earlier in 2023. Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman participated in the agreement. Participants committed to ongoing monthly reviews of market conditions and compliance levels, with the next assessment scheduled for September 6.
Despite the August price correction, Brent and WTI remained above their average levels in June. Brent crude averaged $85 a barrel that month, which is $22 below May’s 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 lower U.S. inventories, restricted shipping routes, and active conflicts near critical oil and gas infrastructure.