Key facts
- Brent crude surpassed $85 a barrel, marking a four-week high.
- President Trump announced a 20% levy on cargo transiting the Strait of Hormuz.
- A U.S. naval blockade on Iran was reinstated, impacting energy flows.
- Renewed U.S.-Iran strikes have revived fears of a global oil shortage.
- Russia banned diesel exports for one month.
- Freeport LNG terminal to undergo unplanned turnaround until late August.
Renewed U.S.-Iran hostilities have propelled Brent crude prices past $85 a barrel, marking a one-month high, as fears of global oil shortages resurface. President Donald Trump announced a 20% levy on cargo transiting the Strait of Hormuz and reinstated a U.S. naval blockade on Iran, significantly impacting energy flows through the critical waterway.
The conflict has revived the Middle East risk premium, with ICE Brent set to settle above $76 per barrel. Traffic through the Strait of Hormuz has slowed, with shippers halting movement out of the Gulf and insurance costs rising. This comes as the International Energy Agency (IEA) adjusted its 2026 oil demand growth forecast downwards to 1 million barrels per day, while anticipating a 3.7 million b/d fall in world oil supply amidst ongoing disruptions.
In response to the heightened risks, India is accelerating its strategic petroleum reserve buildout, with ONGC planning a new 13-million-barrel crude reserve. Iran has been rushing to export oil, loading 11 million barrels on Thursday amid threats of further U.S. action. Meanwhile, Russia has implemented a one-month ban on diesel exports to curb domestic prices, impacting European diesel cracks. Chevron confirmed its chartered tanker, the Yasa Polaris, was attacked by a drone en route to Novorossiysk.
Other developments include China lifting refined fuel export restrictions, Venezuela approving a revamped Hydrocarbons Law, and President Trump's plan to remove Syria from the list of state sponsors of terrorism. QatarEnergy has paused LNG production restarts following an attack on a carrier, and Turkey and Iraq agreed to extend crude oil flows via the Kirkuk-Ceyhan pipeline for 12 months. Freeport LNG announced an unplanned turnaround at its Texas terminal until late August.