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Crude Benchmarks Post 3rd Straight Weekly Gain Amid Middle East Supply Fears

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Global oil benchmarks logged their third straight week of gains as the escalating US-Iran conflict, a closed Strait of Hormuz, and tanker attacks intensified supply concerns, even as prices pulled back slightly on Friday.

West Texas Intermediate settled higher at $90.47 per barrel, up from $82.47/bbl the previous week, while Brent closed at $98.70/bbl, up from $88.30/bbl a week earlier.

Brent futures registered a weekly increase of 11.8%, while the WTI futures contract rose about 8.3% over the week.

The rally kicked off early in the week following intensified US-Iran military exchanges and reports that Iran had received mediator-backed proposals for a ceasefire.

However, diplomatic hopes quickly evaporated as shipping traffic through the critical Strait of Hormuz ground to a halt due to active military exchanges, tanker strikes near Oman, and decisions by major refiners like India's state-run firms to cancel crude liftings to avoid the hazardous chokepoint.

"The key question is at what price level pressure begins to build on the Trump administration to return to the negotiating table," ING noted.

Mid-week panic deepened significantly as Brent breached the $100/bbl mark on Thursday, hitting its highest level since May 22, while WTI futures touched their highest since June 11.

The upward spiral was supercharged by a combination of factors such as Houthi attacks on Red Sea commercial vessels and Saudi tankers near the Bab el-Mandeb Strait, President Donald Trump's warnings of major military action against Iran, threats from Iranian officials targeting regional exports, and storm-related support from Tropical Storm Bertha.

Meanwhile, Murban widened its premium over Brent well beyond its pre-conflict relationship, when Murban typically traded near parity levels or at only a modest premium, Naveen Das, senior analyst at Kpler, toldin an emailed response.

"As of July 23, 2026, Murban surged 19% to above $106/bbl while Brent climbed to $97-100.69/bbl, putting Murban at a roughly $6-9/bbl premium to Brent, a sharp outlier versus the pre-conflict relationship, where Murban typically traded within a few dollars of Brent or at a modest quality premium," Das said.

Compounding global supply pressures, physical disruptions extended outside the Middle East following an attack on the Caspian Pipeline Consortium terminal on Russia's Black Sea coast, threatening the bulk of Kazakhstan's crude exports.

Although prices cooled on Friday, analysts noted that underlying physical markets remain exceptionally tight.

While the European Union's Oil Coordination Group assured markets that commercial inventories can temporarily cover regional demand, shrinking global stockpiles, low US Strategic Petroleum Reserves, and persistent threats to critical trade corridors leave the energy sector acutely vulnerable to further shocks, analysts warned.

The US oil rig count dropped by two from 452 the previous week to 450, in the week ending July 24, according to data from Baker Hughes (BKR) released Friday. That compares with 415 oil rigs in operation a year earlier.

The consolidated North American oil and gas rig count, a key early indicator of future production levels, increased by 5 to 791 from 786 the previous week.

On the supply side, US commercial crude oil inventories increased by 2 million barrels to 411.7 mmbbls in the week ended July 17, the Energy Information Administration said in its weekly report on Wednesday.

The US oil rig count dropped by two from 452 the previous week to 450, in the week ending July 24, according to data from Baker Hughes (BKR) released Friday. That compares with 415 oil rigs in operation a year earlier.

The consolidated North American oil and gas rig count, a key early indicator of future production levels, increased by 5 to 791 from 786 the previous week.

Money managers in the WTI crude futures and options markets maintained their net long positions in the week ended July 21, according to the Commodity Futures Trading Commission's latest Commitments of Traders report released on Friday.

The data showed that money managers reported 189,485 long positions, up 6,602 from July 14, while short positions were up 6,080 to 102,580.

Meanwhile, OPEC+ producers are expected to approve another oil output increase for September at their August 2 meeting, Reuters reported on Thursday.

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