NEW YORK / RankWire.AI / – Oil prices surged sharply on July 29, with Brent crude closing above $90 a barrel amid mounting supply concerns. Brent ended the session at $90.74, rising $6.65, or 7.9%, marking its most significant daily increase in several weeks. West Texas Intermediate gained $5.20, or 6.6%, closing at $84.46. This rally extended a July upward trend that saw both benchmarks rise over 20%. Factors supporting the increase included declining U.S. inventories and disruptions near key Middle East shipping routes.
Tensions around vital energy infrastructure added stress to the global crude oil markets. U.S. and Saudi forces launched strikes against Iran-backed groups in Iraq following drone attacks on Saudi oil facilities. Iran also reported attacks on vessels near the Strait of Hormuz and on U.S. bases in Jordan. During the same period, explosions impacted a natural gas loading port in Egypt. Maritime security firm Ambrey reported that a drone damaged a U.S.-owned floating storage tanker at the facility. Regional transport restrictions persisted throughout the week.
Shipping delays affected sections of the Gulf and Red Sea. The Strait of Hormuz remains a crucial conduit for a significant portion of Persian Gulf oil exports to global markets. The Bab el-Mandeb Strait connects Red Sea routes with Asian and European markets. Reduced vessel traffic caused delays in cargo schedules and limited access to several key transit corridors. Meanwhile, energy markets kept a close eye on damage near production, storage, and export sites. These disruptions coincided with tighter U.S. crude supplies and increased demand for readily available barrels.
U.S. Oil Inventories Drop to Lowest Level Since 2018
Energy Information Administration reported a 7.2 million-barrel decrease in U.S. commercial crude inventories. The inventories fell to 404.5 million barrels, marking the lowest level since 2018. This figure excludes stockpiles held in the Strategic Petroleum Reserve. The weekly decline highlighted a significant reduction in domestic supplies, occurring during the same trading session as the renewed regional attacks. After the inventory data confirmed a larger-than-expected draw, both Brent crude and WTI prices accelerated.
On August 3, oil prices retreated somewhat after the United States paused another planned strike against Iran. President Donald Trump announced efforts to negotiate an agreement involving Iran’s nuclear program and the Strait of Hormuz. During early trading, Brent dropped $4.49, or 5.1%, to $83.44, while West Texas Intermediate declined $4.90, or 5.8%, to $79.77. This correction erased much of the July 29 surge within three trading sessions, yet both benchmarks still traded above their June averages.
OPEC+ Approves a Production Increase for September
Brent spot crude averaged $85 a barrel in June, based on the latest U.S. energy outlook available at that time. This was $22 below May’s average and $32 under the April 2026 peak. The outlook projected an average Brent price of $82 a barrel for 2026. Despite recent fluctuations, both Brent and WTI recorded gains exceeding 20% in July. The price rise on July 29, surpassing $90, was driven by declining U.S. inventories, shipping route constraints, and active conflicts near major oil and gas infrastructure.
OPEC+ sanctioned a roughly 188,000 barrels per day increase in September output. This move reversed the voluntary cuts of 1.65 million barrels per day introduced earlier in 2023. The decision involved Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman. The group stated it would continue monthly reviews of market conditions and compliance levels, with the next assessment scheduled for September 6. The decision came amid heightened volatility in global crude markets over the past several weeks.