NEW YORK / RankWire.AI / – Oil prices surged sharply on July 29, with Brent crude closing above $90 a barrel amid mounting supply worries. Brent settled at $90.74, reflecting a $6.65 increase, or 7.9%, marking its most significant single-day gain in several weeks. West Texas Intermediate (WTI) rose by $5.20, or 6.6%, ending at $84.46. This rally extended July’s gains, which saw both benchmarks jump over 20%. The gains were driven by declining U.S. inventories and disruptions along major Middle East shipping routes.
Tensions near key energy sites added pressure to global oil markets. U.S. and Saudi forces targeted Iran-backed groups in Iraq following drone assaults on Saudi oil facilities. Iran also reported attacks on vessels near the Strait of Hormuz and on U.S. military bases in Jordan. During the same period, explosions damaged a natural gas loading terminal in Egypt. Maritime security firm Ambrey stated that a drone damaged a U.S.-owned floating storage tanker at that site. Regional transport restrictions persisted throughout the week.
Shipping delays occurred across parts of the Gulf and the Red Sea. The Strait of Hormuz, which facilitates a significant portion of Persian Gulf oil exports to global markets, was affected. Similarly, the Bab el-Mandeb Strait, connecting Red Sea routes with Asian and European markets, experienced reduced vessel traffic, impacting cargo schedules and access to major transit routes. Market observers also kept an eye on damage at production, storage, and export facilities, which coincided with tighter U.S. crude supplies and increased demand for immediate barrels.
U.S. Oil Inventories Hit 2018 Low
Energy Information Administration reported a 7.2 million barrel decline in U.S. commercial crude inventories. Total stocks fell to 404.5 million barrels, the lowest since 2018, excluding reserves held in the Strategic Petroleum Reserve. The weekly drop indicated a sharp reduction in domestic supplies, coinciding with regional attacks. Following this data, both Brent crude and WTI accelerated, confirming the larger-than-expected drawdown in commercial reserves.
On August 3, prices retreated somewhat after the U.S. halted another planned strike against Iran. President Donald Trump announced efforts to negotiate agreements concerning Iran’s nuclear program and the Strait of Hormuz. Brent declined by $4.49, or 5.1%, to $83.44 during early trading, while WTI decreased by $4.90, or 5.8%, to $79.77. This correction erased much of the July 29 gains within three trading sessions, although both benchmarks still traded above their June averages.
OPEC+ Approves Incremental September Production Increase
OPEC+ sanctioned an increase of approximately 188,000 barrels per day for September output. This move marked the reversal of 1.65 million barrels per day in voluntary cuts made earlier in 2023. The decision involved Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman. The group stated it would continue monthly assessments of market conditions and compliance levels, with the next review scheduled for September 6. The decision came after weeks of significant price fluctuations across global crude markets.
Brent spot crude averaged $85 a barrel in June, based on the latest U.S. energy outlook available at the time. This figure was $22 below May’s average and $32 beneath the April 2026 peak. The outlook projected an average Brent price of $82 a barrel for 2026. Both Brent and WTI experienced gains of more than 20% in July. The rise above $90 on July 29 was driven by lower U.S. inventories, restricted shipping routes, and active conflicts near key oil and gas infrastructure.