Oil price jumps to $95 as Middle East tensions tighten global supply

KUALA LUMPUR, 23 JULY 2026 —

Benchmark Brent crude surged past $95 a barrel on Wednesday for the first time in six weeks after renewed clashes between the US and Iran over the Strait of Hormuz compounded Houthi threats to Saudi oil shipments through the Bab el-Mandeb strait.

The spike marks the fastest monthly increase since March, when US-Israeli attacks on Tehran first disrupted Gulf exports via Hormuz. Analysts at Goldman Sachs now warn that Brent could reach $120 a barrel by year-end unless the strait reopens to shipments.

Fatih Birol, executive director of the International Energy Agency, told reporters on Tuesday that emergency stockpiles and alternative export routes had so far cushioned markets. IEA members released about 400 million barrels of crude and products, while Saudi Arabia and the UAE rerouted cargoes through other channels. European and American producers also raised exports, and major buyers such as China cut purchases.

Even so, the slowdown in crude buying has forced refiners worldwide to reduce output, tightening supplies of diesel, gasoline and other fuels. Birol said refined product markets are now considerably tighter than crude, with road fuels still lagging despite higher Gulf deliveries.

Gas markets face similar strain. Birol noted that US and Canadian LNG exports have offset roughly 70% of lost Gulf gas flows through Hormuz, but European buyers are racing to refill storage before winter, keeping prices elevated.

Norway’s state oil company Equinor reported a near doubling in quarterly profit to $11.5 billion as the war’s effect on prices boosted earnings. Meanwhile, Donald Trump threatened to destroy an Iranian bridge or power plant for every vessel struck in Hormuz. Iran’s foreign minister, Abbas Araghchi, responded on X that the country’s doctrine of “eye for an eye” would trigger a “powerful and decisive response” to any aggression against its infrastructure.

Civilian targets have become collateral damage. Iran has struck energy facilities and desalination plants in Gulf states it says support military action, though international law generally bars such attacks unless facilities serve a military purpose. UN Secretary-General António Guterres called the strikes unacceptable on Tuesday.

Negotiations remain stalled, and both sides are leveraging asymmetrical pressure. US strikes intensified after Trump said the conflict had already cost America $37.5 billion. Birol stressed that a full reopening of Hormuz is essential to prevent further deterioration in global energy security.