NEW YORK / RankWire.AI / – On July 29, Brent crude prices rose above $90 a barrel amid market reactions to tightening supplies and escalating Middle East tensions. The contract closed at $90.74, reflecting an increase of $6.65, or 7.9%, during the trading session. Meanwhile, West Texas Intermediate gained $5.20, or 6.6%, finishing at $84.46. These gains marked the most significant daily increases for both benchmarks in several weeks. Oil prices also extended their July rally, pushing both contracts up by more than 20%.
Markets experienced additional pressure due to military actions near key production and shipping hubs. U.S. and Saudi forces targeted Iran-backed groups in Iraq following drone attacks aimed at Saudi oil facilities. Iran also reported assaults on ships near the Strait of Hormuz and on U.S. bases in Jordan. During the same period, explosions damaged a natural gas loading site in Egypt. Maritime security firm Ambrey reported damage to a U.S.-owned floating storage tanker at the Egyptian location.
Disruptions caused by these hostilities impacted traffic along major routes used by global energy suppliers. Shipping activity was restricted in parts of the Gulf and the Red Sea. The Strait of Hormuz, responsible for a large share of oil exports from Persian Gulf producers, and the Bab el-Mandeb Strait, which connects Red Sea shipping lanes with Asian and European markets, both experienced delays. These disruptions affected cargo schedules and heightened pressure on existing supplies. Traders closely monitored damage reports near energy infrastructure and transport routes.
U.S. Crude Inventories Decline Significantly
A report from the Energy Information Administration bolstered the July 29 price increase by revealing a sharp drop in U.S. commercial oil stocks, falling by 7.2 million barrels. The inventories decreased to 404.5 million barrels, reaching their lowest point since 2018. This figure excludes crude stored in the Strategic Petroleum Reserve. The report confirmed a substantial weekly reduction in available supplies amid ongoing concerns over transportation disruptions, military strikes, and damage near regional energy facilities.
However, on August 3, oil prices saw a steep decline after the United States halted a planned strike against Iran. President Donald Trump announced efforts to negotiate an agreement related to Iran’s nuclear program and the Strait of Hormuz. During early trading, Brent fell by $4.49, or 5.1%, to $83.44, while West Texas Intermediate declined by $4.90, or 5.8%, to $79.77. This drop erased much of the July 29 rally within just three trading sessions.
OPEC+ Approves Additional Production for September Amid Price Drop
As prices declined, OPEC+ agreed to increase oil output for September, raising its target by approximately 188,000 barrels per day. The move completes the reversal of 1.65 million barrels per day in voluntary cuts that had been implemented earlier in 2023. Participating members include Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman. They also committed to ongoing monthly reviews of market conditions and compliance with production quotas, with their next assessment scheduled for September 6.
Despite the August reduction, Brent and WTI prices still remained above their average levels in June. Brent crude averaged $85 a barrel during that month, which was $22 below May’s levels and $32 beneath the April 2026 peak. The July energy outlook projected an average Brent price of $82 for 2026. The move above $90 on July 29 was driven by declining U.S. inventories, constrained shipping routes, and active conflicts near major energy infrastructure sites.