NEW YORK / RankWire.AI / – On July 29, Brent crude oil prices exceeded $90 a barrel as traders responded to tightening supply conditions and renewed hostilities in the Middle East. The contract closed at $90.74, reflecting a $6.65 increase, or 7.9%, for the trading session. Meanwhile, West Texas Intermediate (WTI) rose by $5.20, or 6.6%, ending at $84.46. These shifts represented the most significant daily gains for both benchmarks in several weeks. Oil prices also continued a rally from July that boosted both contracts by over 20%.
Escalating military tensions around critical production and shipping zones intensified the market’s volatility, with U.S. and Saudi military forces striking Iran-backed factions in Iraq following drone attacks on Saudi oil facilities. Iran also reported assaults on vessels near the Strait of Hormuz and on U.S. military bases in Jordan. Simultaneously, explosions affected a natural gas loading site in Egypt, with maritime security firm Ambrey reporting damage to a U.S.-owned floating storage tanker at the Egyptian site.
These conflicts disrupted traffic along vital routes used by global energy suppliers, as commercial shipping remained constrained in sections of the Gulf and the Red Sea. The Strait of Hormuz, which accounts for a substantial portion of Persian Gulf oil exports, and the Bab el-Mandeb Strait, linking Red Sea shipping lanes with Asian and European markets, experienced delays that impacted cargo schedules and heightened pressure on available supplies. Traders closely monitored damage at energy facilities and transport infrastructure during this period.
U.S. crude inventories decline sharply
The rise in crude prices on July 29 was further supported by domestic inventory data, with the Energy Information Administration reporting a reduction of 7.2 million barrels in commercial oil stocks. This decrease brought inventories down to 404.5 million barrels, their lowest point since 2018, excluding crude stored in the Strategic Petroleum Reserve. The report confirmed a significant weekly decline in U.S. supplies, reflecting the impact of transport disruptions, military actions, and damage near regional energy sites, fueling market concerns about supply tightness.
However, prices experienced a sharp decline on August 3 after the United States halted another planned strike against Iran, and President Donald Trump announced efforts toward an agreement concerning Iran’s nuclear program and the Strait of Hormuz. During early trading, Brent fell by $4.49, or 5.1%, to $83.44, while WTI declined by $4.90, or 5.8%, settling at $79.77. This rapid drop erased much of the July 29 increase within just three trading sessions.
OPEC+ approves additional output for September as prices retreat
In response to declining prices, OPEC+ approved an increase in oil production targets for September, raising output by roughly 188,000 barrels per day. This decision effectively reversed 1.65 million barrels per day of voluntary cuts implemented earlier in 2023. The agreement was supported by Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman, with members stating that they will continue monthly evaluations of market conditions and compliance levels. The next assessment is scheduled for September 6.
Despite the pullback in prices during August, Brent and WTI remained above their average levels for June. Brent crude averaged $85 a barrel in June, which is $22 below the May average and $32 below the peak in April 2026. The July energy outlook projected the average Brent price for 2026 at $82 a barrel. The move above $90 on July 29 was driven by declining U.S. inventories, limited shipping routes, and ongoing conflicts near key oil and gas infrastructure, highlighting ongoing market concerns.