Our last issue tracked oil tensions squeezing markets and household costs. Since then the market has whipsawed twice: a truce briefly calmed things down, then a fresh round of fighting sent prices right back up.
Truce, Then Crisis, In Five Weeks
On June 18, the US and Iran signed a truce that reopened the Strait of Hormuz. Prices dropped fast. Brent, which had averaged $85 in June, fell below $70 by July 1 as tankers resumed transit and OPEC+ moved to raise output. For about two weeks, oversupply was the story.
Then it wasn't. Iran resumed attacking tankers in the Strait, the US launched a bombing campaign against Iranian targets that's now run for nearly two weeks straight, and Iran's Houthi allies in Yemen declared a maritime blockade against Saudi Arabia, opening a second front through the Red Sea. Brent broke above $100 on July 23, its first time there in two months, before easing slightly on reports of a Pakistan- and China-brokered push for new talks.
The Numbers
- Brent: $85 average in June → below $70 by July 1 → over $100 on July 23 → $96.78 most recently
- WTI: high-$60s in early July to $92.19 at its July 23 peak
- Oil is up more than 20% this month, and still up roughly 10% for the week despite the pullback
A Second Front
What's different this time is that the risk isn't confined to Hormuz anymore. Houthi threats against Red Sea shipping have put new pressure on Saudi Arabia's overland pipeline route, previously the relief valve during the worst of the crisis. Some analysts see a scenario where a wider conflict pushes Brent back toward its 2022 high near $128, though the Pakistan-China diplomatic push gives the market at least a near-term reason to cool off from $100.
Forecasters remain split. Some see Brent averaging in the mid-$80s this quarter before easing into the high-$70s by year-end. Others assume the risk premium eventually fades entirely. For now, every night of continued strikes keeps that premium priced in.