Crude has soared to its highest in about a month, as escalations in the Iran war revive concerns over flows from the energy-rich region
Published Thu, Jul 16, 2026 · 06:36 AM — Updated Thu, Jul 16, 2026 · 12:50 PM
[TOKYO] Oil steadied on Thursday (Jul 16) after a three-day rally as the US carried out another round of airstrikes on Iran following a series of shipping attacks by the Islamic Republic this week.
Global benchmark Brent traded below US$85 a barrel after gaining 12 per cent in the previous three sessions, while West Texas Intermediate (WTI) was under US$80.
The US completed more airstrikes on Iran and said it disabled an unladen oil tanker headed for a port in the Opec+ member.
Earlier, Iranian forces had struck ships in the Strait of Hormuz, spooking shippers and prompting a dip in observable traffic.
Crude has soared to its highest in about a month as the escalation in the conflict revives concerns over flows from the energy-rich region, erasing part of a roughly 30 per cent slump in the second quarter.
Meanwhile, near-daily Ukrainian strikes on Russian fuel-producing plants and tankers further threaten global supply.
“So not only have we now lost all of the Straits of Hormuz again, but we have also lost the crude oil and the refineries in Russia,” Jeff Currie, a senior adviser at Carlyle Group, said in an interview on Bloomberg TV.
“The situation in energy, I would argue, is pretty dire.”
US President Donald Trump pledged to intensify the bombardment of Iran until Teheran stops attacking ships in the strait and agrees to open the energy chokepoint.
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The Wall Street Journal reported that Trump is leaning towards expanding military operations and discussed the seizure of Kharg Island, home to the Islamic Republic’s main oil export terminal.
Teheran shows little sign of backing down. The Islamic Revolutionary Guard Corps said on Wednesday that the strait will remain closed until the US ends its strikes and the blockade of Iranian ports.
The global economy will face a renewed challenge if shipping through the strait is not resolved in a matter of weeks, International Energy Agency executive director Fatih Birol said in an interview with Bloomberg TV.
Iran’s recent attacks on oil tankers are jeopardising an innovative trade that rapidly expanded in recent months to become one of the main ways for getting crude out of the Persian Gulf – so-called shuttle runs.
The system, where ships transfer crude to vessels outside the strait, has become a major lifeline for countries including the United Arab Emirates during the war, although it is possible any pause could be short-lived.
A seven-day moving average of oil flows through the strait has slumped by 4.6 million barrels a day to 3.9 million barrels a day since fighting resumed a week ago, reflecting the collapse of the ceasefire, renewed Iranian attacks and the return of the US blockade, RBC Capital Markets LLC analysts including Helima Croft said.
Even if Trump were to opt for a strategic retreat, “we do not see Hormuz traffic returning to pre-war levels as long as shippers have to contend with the threat of mines, missiles, drones, and Teheran tolls”, they said.
Markets may adjust to the backdrop rather than expect a return to normal, John Woods, chief investment officer and head of investment solutions for Asia at Lombard Odier, said in an interview with Bloomberg TV.
“What we’re likely to see now is something along the lines of a semi-permanent, periodic disruption in the supply of oil through the Strait of Hormuz, and it’s one that the market will have to come to terms with,” Woods said.
“It’s a manageable outcome. I don’t think we’re looking at a benign de-escalation any more.”
With the disruptions, “markets will just essentially have to price in maybe a small US$5 to US$15 premium on Brent as the new normal,” he said.
Even so, tanker traffic continued. US-assisted transits reached double digits on Tuesday night, central command spokesman captain Tim Hawkins said.
Of the roughly 300 ships that passed through the waterway over the past week, nearly half were helped by US forces.
Meanwhile, US crude stockpiles dropped by almost 1.7 million barrels last week as oil exports rose – though they remain below pre-war averages, according to Energy Information Administration data released on Wednesday.
Inventories at Cushing, Oklahoma – the delivery point for WTI – climbed above the 20 million barrel mark seen as the hub’s operating minimum. BLOOMBERG
