NEW YORK / RankWire.AI / – Oil prices surged sharply on July 29, with Brent crude closing above $90 a barrel amid mounting supply concerns. Brent settled at $90.74, reflecting a $6.65, or 7.9%, increase and marking its most significant daily gain in several weeks. West Texas Intermediate also rose by $5.20, or 6.6%, finishing at $84.46. This rally extended the July upward trend that saw both benchmarks climb over 20%. Contributing factors included declining U.S. inventories and disruptions along critical Middle Eastern shipping lanes.
Heightened military activity near vital energy infrastructure added pressure on global crude markets. U.S. and Saudi forces targeted Iran-backed groups in Iraq after drone assaults struck Saudi oil facilities. Iran reported attacks on vessels near the Strait of Hormuz and on U.S. installations in Jordan. Meanwhile, explosions impacted a natural gas port in Egypt during the same timeframe. Maritime security firm Ambrey stated that a drone damaged a U.S.-owned floating storage tanker at the site. Regional transportation restrictions persisted throughout the week.
Delays affected commercial shipping lanes across parts of the Gulf and Red Sea. The Strait of Hormuz, which transports a significant share of Persian Gulf oil exports to global markets, was impacted, along with the Bab el-Mandeb Strait connecting Red Sea routes to Asia and Europe. The reduction in vessel traffic disrupted cargo schedules and limited access to key transit routes. Market participants also kept a close watch on damage at production, storage, and export sites. These disruptions coincided with tighter U.S. crude inventories and heightened demand for immediate supply barrels.
U.S. Oil Inventories Hit 2018 Lows
Energy Information Administration reported a 7.2 million barrel decline in U.S. commercial crude stockpiles. Inventories dropped to 404.5 million barrels, the lowest since 2018, excluding crude held in the Strategic Petroleum Reserve. This weekly decrease indicated a sharp reduction in domestic supplies and coincided with the renewed regional attacks. Both Brent crude and WTI rallied further following the inventory report, which confirmed a larger-than-anticipated drawdown of commercial reserves.
On August 3, oil prices retraced some of their earlier gains after the U.S. halted a planned strike against Iran. President Donald Trump also announced efforts to negotiate agreements related to Iran’s nuclear program and the Strait of Hormuz. During early trading, Brent dropped by $4.49, or 5.1%, to $83.44, while West Texas Intermediate declined by $4.90, or 5.8%, to $79.77. This correction erased much of the July 29 rally within three trading sessions, although both benchmarks remained above their June averages.
OPEC+ Approves Elevated Production Levels for September
The OPEC+ alliance authorized an increase of approximately 188,000 barrels per day for September’s output. This move marked the reversal of 1.65 million barrels per day of voluntary cuts implemented in 2023. Representatives from Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman participated in the decision. The group also committed to ongoing monthly reviews of market conditions and compliance with production targets. Their next assessment is scheduled for September 6. The decision came amid recent significant fluctuations in international crude prices.
Brent spot crude averaged $85 a barrel in June, based on the latest U.S. energy outlook available at the time, representing a $22 decline from May and a $32 drop from the April 2026 peak. The outlook projects an average Brent price of $82 a barrel for 2026. Both Brent and WTI experienced gains of over 20% during July, driven by the rise above $90 on July 29, supported by lower U.S. inventories, shipping restrictions, and ongoing conflicts near major oil and gas facilities.