Oil Prices Hit Six-Week High as Middle East Tensions Heighten Supply Fears

News 10:22 AM - 2026-07-23

Oil prices.

Oil prices climbed by more than 2% on Thursday, reaching their highest levels in more than six weeks as escalating tensions in the Middle East fuelled fears of major disruptions to global crude supplies.

Brent crude futures rose $2.20, or 2.3%, to $96.27 a barrel, their highest level since 8 June, after settling more than $3 higher at $94.07 in the previous session.

Meanwhile, US West Texas Intermediate (WTI) crude futures gained $1.65, or 1.9%, to $88.48 a barrel, extending Wednesday's rally, during which prices climbed by as much as 3%.

The latest gains came as geopolitical tensions intensified following fresh US military strikes against Iran and renewed threats to key oil shipping routes in the Gulf and the Red Sea.

Iran's Islamic Revolutionary Guard Corps (IRGC) said an oil tanker caught fire after an explosion while attempting to navigate what it described as a minefield south of the Strait of Hormuz. According to the IRGC, two additional tankers turned back following the incident.

In a statement, the Revolutionary Guard claimed that the Strait of Hormuz was now under Iranian control and would remain closed for as long as US military operations continued in the region. It warned that no oil tanker would be permitted to enter or leave the strategic waterway without prior coordination with Iranian authorities.

The announcement has heightened concerns over the security of one of the world's most critical energy corridors. Roughly one-fifth of global oil consumption passes through the Strait of Hormuz, making any disruption to shipping a significant threat to international energy markets.

Adding to market anxiety, Yemen's Iran-aligned Houthi movement announced that it intended to target vessels transporting Saudi crude through the Bab el-Mandeb Strait and said it would impose a naval blockade on Saudi Arabia.

The prospect of simultaneous disruption to both the Strait of Hormuz and the Bab el-Mandeb Strait has raised fears of a severe constraint on global oil supplies, as both waterways are vital routes for energy exports from the Middle East.

Priyanka Sachdeva, Senior Market Analyst at Phillip Nova, said oil markets were facing the unusual risk of supply disruptions across both strategic shipping lanes at the same time.

She said geopolitical tensions had once again added a substantial risk premium to oil prices, but cautioned that a sustained rally would depend on evidence of prolonged shipping disruptions or a significant reduction in crude supplies reaching global markets.

Investors are expected to continue closely monitoring developments in the region, with any further escalation likely to keep oil markets volatile and maintain upward pressure on crude prices.


PUKMEDIA