Full Breakdown
Oil Prices Surge as Iran-U.S. Hostilities Disrupt Key Shipping Lanes
7/23/2026, 12:35:09 AM
Core Event
On Wednesday, Brent crude rose almost 5% to just above $95 a barrel and U.S. crude climbed more than 4% to over $88 a barrel, marking the first breach of the $95 level in nearly six weeks. The rally followed an 11th consecutive night of U.S. strikes on Iranian aircraft hangars and drone sites, reigniting tensions that had briefly eased after a tentative cease-fire deal was declared “over” on July 8.
Context: Threats to the Strait of Hormuz and Bab el-Mandeb
The renewed attacks have heightened risk to two vital maritime chokepoints. In the Strait of Hormuz, U.S. Secretary of State Marco Rubio warned that Iran’s targeting of global shipping is “unacceptable.” Simultaneously, the Houthi movement in Yemen announced a naval blockade of Saudi Arabia and urged vessels to avoid the Bab el-Mandeb Strait, the Red Sea gateway. Both waterways are essential for the flow of Saudi oil and broader global commerce.
Market Data and Shipping Disruptions
Since the start of the month, oil prices have risen 30%, and they are up more than 55% since the beginning of the year. Data provider Kpler reported sharply reduced traffic in both straits, while ship broker Clarksons noted that four tankers rerouted through the Suez Canal, adding well over 10,000 nautical miles (approximately 20,000 km) and weeks of travel time. Analysts at Goldman Sachs warned that, without a full reopening of the Hormuz route, prices could approach $120 a barrel by year-end.
Official Responses
Rubio reiterated U.S. commitment to protect commercial shipping while keeping diplomatic channels open. President Donald Trump declared the July 8 cease-fire “over” and warned that U.S. strikes would intensify, threatening Iranian infrastructure. UN Secretary-General António Guterres called recent attacks on civilian energy and water facilities “unacceptable”.
