Oil prices rose approximately 2% to a one-month high on July 14 after the U.S. reimposed a naval blockade on Iran, reducing oil flows through the Strait of Hormuz and reigniting supply concerns across global energy markets.
Brent futures rose $1.43, or 1.7%, to settle at $84.73 per barrel, while U.S. West Texas Intermediate crude rose $1.20, or 1.5%, to settle at $79.34. Both benchmarks closed at their highest levels since mid-June, marking the second consecutive session of gains and keeping Brent in technically overbought territory.
Before the Iran war, approximately 20% of global oil supplies flowed through the Strait of Hormuz. The resumption of U.S. attacks on Iran has accelerated disruptions this week, according to energy advisory firm Ritterbusch and Associates, with additional U.S. bombing following the reinstatement of the blockade.
Prices pared gains briefly after President Trump stepped back from his proposed 20% transit fee on Hormuz cargo, saying he would seek investment deals with Gulf states instead. However, prices rebounded after reports that Iranian cruise missiles struck two Emirati oil tankers, killing one Indian crew member and wounding eight others.
The attacks on Emirati tankers have intensified concerns about the safety of shipping operations in waters near Dubai and the broader UAE coastline. The strikes feed doubts that a memorandum of understanding signed last month will lead to a permanent ceasefire in the conflict.
In early July, when a ceasefire between the U.S. and Iran appeared to be holding, Brent and WTI futures were trading near levels seen before the conflict began. The renewed hostilities have reversed much of that decline.
U.S. consumer inflation data for June showed prices dropped 0.4% from May, the largest monthly decline in four years, with year-over-year inflation easing to 3.5%. However, financial markets still expect a potential interest rate hike from the Federal Reserve due to energy-driven inflation risks.
U.S. diesel futures are up approximately 21% in July versus a 14% gain for crude, pushing refining profit margins to record highs, according to LSEG data. Energy firms pulled an estimated 2.7 million barrels of crude from storage in the week ended July 10, marking the 13th drawdown in 14 weeks.
Sources: The Business Times, Chicago Tribune Fed testimony coverage
