FINWIRES · TerminalLIVE
FINWIRES

US Oil Update: Crude Edges Higher on Trump Warning to Iran, Houthi Maritime Embargo on Saudi Arabia

By

Crude futures edged higher in midday trading on Monday after President Trump said Iran would pay for the deaths of three US service members, while Houthi militants in Yemen declared a maritime embargo on Saudi Arabia.

Front-month West Texas Intermediate crude futures rose 0.4% to $82.90 per barrel, while Brent futures advanced 0.9% to $88.90/bbl.

Soojin Kim, research analyst at MUFG, said crude prices rose after the US and Iran sharply escalated hostilities, heightening concerns over disruptions to Middle East oil supplies.

Kim said the latest developments included continued US strikes on Iranian military targets, Iranian attacks on shipping in the Strait of Hormuz, damage to a major Kuwaiti oil facility, and renewed Houthi threats.

On Monday, Trump warned Iran that it would face a severe response for any killing of American military personnel, saying Tehran would "pay" for such actions multiple times over. "Every time Iran kills an American Soldier they will pay for that killing many times over!" Trump said in a post on Truth Social.

Trump's warning comes amid heightened US-Iran tensions, with regional security risks continuing to weigh on energy markets and shipping routes across the Middle East.

US Central Command said on Sunday that it bombed Iran for the ninth consecutive night in retaliation for repeated attacks on commercial vessels transiting the Hormuz. Iran, in response, continues to attack US bases in the likes of Kuwait, Jordan, Bahrain and Iraq.

Iran's Houthi allies in Yemen, meanwhile, declared a maritime embargo against Saudi Arabia on Monday.

The Yemeni Armed Forces declare a maritime embargo against the criminal Saudi enemy effective immediately upon the issuance of this statement, Houthi rebel spokesperson Yahya Saree said in a video published on X.

The Houthis have repeatedly threatened to close the Bab el-Mandeb Strait during the Middle East conflict. A wider conflict with the Houthis could jeopardize Saudi Arabia's oil exports through its East-West Pipeline, which allows crude to bypass the Strait.

President Trump updated UK Prime Minister Andy Burnham on developments in the Middle East on Monday and discussed efforts to ensure the safe passage of commercial shipping through the Hormuz.

However, Iran reportedly confirmed receiving proposals from "certain" mediators aimed at preventing further escalation of tensions with the US.

Esmail Baghaei, the spokesperson of Iran's foreign ministry, said during his weekly press briefing on Monday that mediators are actively striving to prevent further escalation and have conveyed proposals to Tehran, but he did not give further details.

The US-Iran hostilities have disrupted energy flows through the Strait, with the shipping data from Kpler showing that traffic remained below normal levels, with only 30 verified transits recorded between July 17 and 19.

Kpler said that while the International Maritime Organization's incident tracker shows no additional confirmed attacks since July 16, the broader security environment remains fragile.

Related Articles

Oil & Energy

Crude Surges Over 15% in 2nd Weekly Rally as Middle East Conflict Threatens Key Shipping Routes

Global oil benchmarks tracked their second straight week of gains on Friday, with both Brent and WTI up over 15% as new supply concerns persist amid mounting US-Iran tensions.West Texas Intermediate settled higher at $82.47 per barrel, up from $71.51/bbl the previous week, while Brent closed at $88.30/bbl, up from $75.28/bbl a week earlier.The Brent futures contract registered a weekly increase of 16.2%, while the WTI futures contract rose 15.5% over the week.The rally has been primarily fueled by the escalating conflict in the Middle East, which has severely disrupted maritime trade and energy flows.US Central Command launched a fresh wave of strikes for the seventh consecutive day, beginning at 3 p.m. ET on Friday, targeted at further "degrading Iranian military capabilities."The attacks come a day after the US military destroyed a surveillance tower belonging to Iran's Islamic Revolutionary Guard Corps on the country's southeastern coast.Confirmed flows through the Strait have fallen to just 5.1 million barrels per day, down from 12.5 mmb/d a week ago, with Iranian exports representing 1.7 mmb/d of that total, according to a J.P. Morgan note.Commercial shipping activity in the Strait of Hormuz slumped to a three-week low on Thursday, as heightened military tensions between the US and Iran forced operators to prioritize security over trade routes, Kpler's shipping data showed on Friday."Confirmed crossings through the monitored Strait of Hormuz zone declined further on 16 July, falling to eight transits from 15 seen the previous day and reaching a three-week low," according to MarineTraffic, a ship tracking firm owned by Kpler.Compounding supply fears, Iran has renewed threats targeting traffic through the Strait of Bab al-Mandab, another vital route for Saudi exports, prompting fears of a broader supply crunch."New concerns were recently fueled by Iran's renewed threat to close the Strait of Bab al-Mandab, through which a significant portion of Saudi oil exports is currently being rerouted due to the blockade of the Strait of Hormuz," Commerzbank analysts said.The strategists noted that any disruption in the Bab al-Mandab Strait would likely push oil prices higher.Supply concerns were amplified by renewed Ukrainian attacks on Russian energy infrastructure.On Friday, Ukraine struck the Yanos refinery and several Russian military-linked fuel and naval assets during operations on July 16-17, according to a statement by the General Staff of the Armed Forces of Ukraine.The strikes damaged the Yanos refinery in Russia's Yaroslavl region, igniting a fire while officials assessed the extent of the damage, the General Staff said.The plant processes about 15 million metric tons of crude annually and produces gasoline, diesel, jet fuel, and other refined products, the General Staff said.Ukraine also struck two tankers, including a liquefied gas carrier, and a tugboat in the Black Sea and Azov Sea, the General Staff said.The military said Russia uses the vessels to transport oil, petroleum products and liquefied gas while bypassing international sanctions and supplying fuel for military operations.Separately, fresh Ukrainian drone strikes on refineries in Russia's Bashkortostan and Krasnodar regions have severely hampered Russia's refining capacity, forcing Russian energy firms to reportedly seek gasoline imports from India.The Security Service of Ukraine's drone strikes on tankers Louise 1 and Banda this week highlighted an escalation in attacks targeting the maritime infrastructure supporting Moscow's oil exports.RBC analysts said Ukrainian strikes on Russian energy infrastructure have pushed damaged refinery capacity to an estimated 4 mmb/d.RBC said June data showed Russian refinery intake had fallen to 3.43 mmb/d, the lowest level on record, while crude exports rose to 5.47 mmb/d, the highest since October 2019.Meanwhile, in Europe, uncertainty over the European Union's failure to finalize its 21st sanctions package against Russia added to concerns over the effectiveness of the bloc's existing oil price cap mechanism.Beyond geopolitical risks, tightening physical fundamentals drove bullishness in the market.On Wednesday, data from the US Energy Information Administration showed a 1.7 mmbbl decrease in commercial crude inventories, bringing levels to 409.7 mmbbls.While OPEC projects a more modest demand growth of 800,000 b/d for 2026, the supply side remains under heavy pressure.The US oil rig count rose by seven to 452 in the week ended July 17, from 445 the previous week, according to Baker Hughes (BKR). That compares with 422 oil rigs operating in the US a year earlier.The consolidated North American oil and gas rig count, a key early indicator of future production levels, increased by 26 to 786 from 760 the previous week.Money managers in the WTI crude futures and options markets maintained a bullish stance in the week ended July 14, according to the Commodity Futures Trading Commission's latest Commitments of Traders report released on Friday.The data showed money managers held 182,883 long positions, down 3,606 from July 7, while short positions fell by 15,310 to 96,500.Looking forward, as geopolitical risks converge across the Middle East and Eastern Europe, energy markets remain highly sensitive to any further disruptions to global supply chains, analysts said.

$BKR
Oil & Energy

US Natural Gas Prices Extend Weekly Decline as Bearish Weather Outlook Offsets Smaller Storage Build

US natural gas prices ended another week lower on Friday, despite the lower-than-expected gas injection into storage, amid milder weather forecasts and low LNG feedgas flows.In the futures market, the Nymex front-month August contract fell to $2.916 per million British thermal unit, down from $3.212/MMBtu on July 10.Natural gas spot prices dropped by $0.51/MMBtu to $2.80/MMBtu during the week ended July 15, from $3.31/MMBtu the prior week, according to the US Energy Information Administration's Weekly Gas Storage Supplement, released Thursday.Prices were mixed across major regional hubs during the week, ranging from a decrease of $0.54/MMBtu at Florida Gas Zone 3 to an increase of $0.65/MMBtu at the Northwest Sumas border crossing with Canada.The western regions saw a surge in prices, with average daily temperatures soaring by 4 degrees Fahrenheit, resulting in 71 more cooling days than the prior week. As a result, PG&E (PCG) Citygate rose $0.48/MMBtu over the past week to $2.55/MMBtu on July 15.The Pacific region similarly reported a 16% surge in natural gas consumption this week, to 0.8 billion cubic feet per day, driven by a 44% increase in the power sector.US LNG feedgas flows retreated during the week, with averages dropping below 18 billion cubic feet and the 30-day moving average of 18.60 Bcf, according to the Bloomberg LNG Feedgas Model. This was primarily due to the Freeport LNG terminal in Texas entering into a major planned maintenance starting July 10, which is set to last until late August.The net injection into storage for the week ended July 10 was 41 Bcf, down from last week's 61 Bcf, bringing total gas inventories to 3,024 Bcf, according to EIA data.Storage injections came in below forecasts, which had expected a 45 Bcf net injection into working gas for the week. It was also below the prior year's figures at 47 Bcf and the five-year average for this period, at 45 Bcf, according to data compiled by Investing.com.Most regions reported net injections during the week, with the Midwest and East reporting the highest inflows at 20 Bcf and 14 Bcf, respectively.Inventories across the Mountain and Pacific regions were 21% and 22% above their respective five-year averages, despite high consumption during the quarter.At 3,024 Bcf, US working gas inventories were 21 Bcf, or 1%, below the corresponding period a year ago, while reporting a surplus of 181 Bcf, or 6%, compared to the five-year average for this period.According to Pinebrook Energy Advisors, this storage build suggests a tightening driven by "stronger natural gas-fired generation as wind output dropped sharply," which helped offset the impact of milder-than-expected temperatures.Weather forecasts have continued to turn bearish over the past week, with most of the northeast set to experience average temperatures, and some regions below-average temperatures from July 24 to July 30, according to the National Weather Service.A total of 34 LNG carriers departed US ports during the week, up from 31 the previous week, with a combined capacity of 131 Bcf, 14 Bcf higher than a week earlier.Meanwhile, the US gas rig count remained unchanged at 126 in the week ending July 17, according to data from Baker Hughes (BKR) released Friday. That compares with 117 gas rigs in operation in the US a year earlier.The consolidated North American oil and gas rig count, a key early indicator of future production levels, increased by 26 to 786 from 760 the previous week.In international markets, European TTF gas prices averaged $17.24/MMBtu for the week ended July 15, $1.85/MMBtu higher than the previous week. Meanwhile, the Japan-Korea Marker averaged $16.62/MMBtu, about $0.41/MMBtu above the prior week.

$BKR$PCG
Oil & Energy

US Oil Update: Crude Surges as Centcom Launches 7th Round of Strikes Against Iran

Crude futures neared 5% in after-hours trading on Friday as US-Iran military attacks and escalating security risks around Middle East shipping routes stoked concerns over potential disruptions to global crude supplies.Front-month West Texas Intermediate crude futures jumped 4.46% to $82.47 per barrel, while Brent futures advanced 4.83% to $88.30/bbl.Saxo Bank strategists said that crude extended its rally as energy and refined fuel flows through the Strait of Hormuz continue to slow amid the escalating conflict between the US and Iran.The analysts said that renewed disruption has interrupted the recent recovery in regional supply, reviving concerns about tighter global markets.US Central Command said a seventh round of air strikes was underway beginning at 3 p.m. ET on Friday with the goal of further "degrading Iranian military capabilities."The attacks come a day after the US military destroyed a surveillance tower on Thursday belonging to Iran's Islamic Revolutionary Guard Corps on the country's southeastern coast.The US is also reportedly sending dozens of refueling planes to Israel, raising expectations of a near-term escalation in the Middle East conflict that has roiled energy markets in recent months.Iran, in response, attacked US military infrastructure in Bahrain, Jordan, Kuwait, Oman, Qatar and Syria as Tehran steps up its counterstrikes since fighting picked up early last week.Kuwait reported strikes on a water desalination and electricity plant, with many power-generation units sustaining damage.Tehran also fired at Syria, apparently for the first time since the outbreak of the conflict, targeting what it described as a US special forces base in Tanf, an operation that was refuted by Centcom.Soojin Kim, research analyst at MUFG, said fresh US strikes on Iranian military targets, alongside attacks on vessels near Iran's main export terminal and missile threats extending to Qatar and the Bab el-Mandeb shipping route, heightened fears of broader regional disruption.US oil and gas stocks climbed this week, buoyed by a jump in crude prices as escalating tensions in the Middle East prompted traders to recalibrate risk in the energy sector ahead of Q2 earnings season, RBC Capital Markets strategists said in a note on Friday.The analysts said the commodity price spike helped lift the XOP energy sector index by 4%, decoupling from natural gas, which saw Henry Hub prices slide 4%.Meanwhile, RBC said that Canadian crude exports from the Westridge Marine Terminal held steady in June, with robust demand from Asia driving the Trans Mountain pipeline to operate at or near its full contracted capacity.The terminal in British Columbia saw 26 oil tankers depart in June, matching the previous month's volume, the research firm said.The steady pace of shipments signals that the expanded Trans Mountain Pipeline continues to perform at its contracted capacity of 712,000 barrels per day.