Oil prices moved higher on Friday after Iran reportedly struck two tankers attempting to cross the Strait of Hormuz. Tehran also declared that the strategically important waterway was closed.
Brent and West Texas Intermediate were heading for monthly gains of more than 20% in July. This marked a sharp reversal after both crude benchmarks fell by nearly 20% in June.
Middle East Conflict Drives Oil Prices Higher
The dramatic monthly recovery followed the collapse of an interim peace arrangement between the United States and Iran.
Both countries resumed military action, increasing fears that oil supplies and international shipping could face further disruption.
Concerns also spread to the Bab el-Mandeb Strait, another important maritime route connecting the Red Sea with the Gulf of Aden. Any disruption in this area could affect energy shipments travelling toward Europe and other global markets.
At 14:38 ET, Brent crude futures for October delivery rose 1.2% to $87.88 per barrel.
U.S. West Texas Intermediate futures for September delivery also gained 1.2%, reaching $84.59 per barrel.
Oil Records a Sharp July Recovery
Oil prices experienced extreme volatility throughout July.
On July 2, Brent and WTI dropped to their lowest levels since late February. The decline came shortly before the reported start of a joint U.S.-Israeli military operation against Iran.
However, prices then climbed rapidly as geopolitical tensions intensified.
Brent reached a monthly high of $95.30 per barrel on July 23. WTI advanced as high as $88.07 per barrel.
From their July lows, the benchmarks gained approximately 36% and 31%, respectively.
Temporary Agreement Initially Eased Supply Concerns
A memorandum of understanding signed by Washington and Tehran in mid-June initially reduced fears of an immediate supply disruption.
Shipping activity through the Strait of Hormuz increased after the agreement. This helped oil prices return closer to pre-conflict levels at the beginning of July.
The improvement proved temporary.
Tensions escalated again in the middle of the month after the United States carried out strikes against Iran following reported attacks on commercial tankers.
Iran subsequently warned that vessels crossing the Strait of Hormuz would need to follow routes approved by Tehran. Ships using alternative routes could reportedly face attack.
Strait of Hormuz Traffic Drops Sharply
The United States continued its military campaign against Iran for 13 consecutive days.
Iran responded with further attacks on ships, U.S. military facilities and American bases across the Gulf region.
As a result, traffic through the Strait of Hormuz declined significantly.
Before the conflict, the waterway handled roughly one-fifth of the world’s oil and gas supplies. A prolonged closure could therefore have serious consequences for global energy markets.
Shipping intelligence company Kpler reported that crossings through the strait fell by 77% in a single day.
Only five vessels completed the journey, and all reportedly followed Iran’s designated transit arrangement. According to Kpler, the figures indicated lower confidence among shipping operators and fewer available routing options.
Bab el-Mandeb Remains Active Despite Risks
Shipping through the Bab el-Mandeb Strait continued despite rising regional instability.
Kpler recorded 47 crossings through the route. However, the company also identified activity involving sanctioned ships, shadow-fleet vessels and at least one transit conducted without normal tracking signals.
The shipping-data provider said operators were closely monitoring vessel traffic, route changes and diplomatic developments.
The situation remains uncertain because public statements from Washington and Tehran continue to conflict.
Iran Reports Attacks on Oil Tankers
Iranian state media reported on Friday that two tankers were struck while attempting to cross the Strait of Hormuz with U.S. air protection.
Iran’s armed forces reiterated that the waterway was closed. They added that vessels would only be permitted to pass after coordinating with the Iranian navy.
Earlier in the week, the United States and Iran had temporarily paused military operations to allow diplomatic negotiations to continue.
However, the ceasefire ended quickly.
U.S. Central Command said Iran launched an unexpected missile attack against American forces in the Middle East on Tuesday. Washington responded with additional strikes on Wednesday.
Conflict Raises Concerns Over Egypt and Suez Canal
There were also indications that the conflict could spread to other countries in the region.
An unidentified drone reportedly struck gas vessels at Egypt’s Damietta port near the Suez Canal on Wednesday. The attack caused fires and raised concerns over the security of another important energy transit corridor.
The incident increased anxiety surrounding both the Suez Canal and the nearby SUMED pipeline.
These routes are widely used to transport crude oil and refined fuels from the Middle East to European markets.
A disruption in Egypt could create further delays, increase shipping costs and place additional upward pressure on global oil prices.
Trump Warns of Further U.S. Strikes
U.S. President Donald Trump said Washington would respond forcefully to Iran.
Speaking to reporters on Friday, Trump suggested that military pressure would continue until Iran was no longer willing to sustain the conflict.
However, he also said U.S. officials remained engaged in discussions with Tehran.
Trump criticized Iran’s approach to negotiations and accused its representatives of repeatedly contradicting previous commitments, including during discussions surrounding the country’s nuclear programme.
Exxon and Chevron Profits Surge
Higher oil prices provided a significant boost to the two largest U.S. oil companies.
ExxonMobil reported a quarterly profit of $14.5 billion. This was more than twice the amount recorded during the same period a year earlier and represented the company’s strongest result since 2022.
Chevron posted earnings of $12.1 billion. Its profit was almost five times higher than the previous year and marked a company record.
The results showed how the sharp rise in crude prices benefited major energy producers.
Shipping Companies Remain Cautious
ExxonMobil Chief Executive Darren Woods said shipping decisions ultimately depended on vessel operators and their crews.
He noted that repeated disruptions and attacks were creating more uncertainty in the Strait of Hormuz.
According to Woods, greater volatility could make shipping companies and crew members less willing to pass through the region.
Reduced shipping activity could restrict the availability of oil in global markets, even when production itself remains unaffected.
China’s Crude Oil Imports Decline
Separate data from the U.S. Energy Information Administration showed that China’s crude oil imports weakened considerably during the second quarter of 2026.
Imports fell by 32% from the previous quarter to approximately 8.1 million barrels per day.
In May and June, daily imports dropped below eight million barrels for the first time since 2016.
China remains the world’s largest crude oil importer, making shifts in its demand important for the global energy market.
Waterborne Oil Shipments Lead the Decline
The EIA said most of the reduction came from oil delivered by tanker rather than through pipelines.
Pipeline imports were estimated to have remained relatively stable.
The largest quarterly decline involved crude shipments from Iraq, which fell by approximately 910,000 barrels per day.
Imports from Russia, China’s largest oil supplier, dropped by around 640,000 barrels per day. Shipments from the United Arab Emirates decreased by approximately 600,000 barrels per day.
Weaker Chinese demand could limit some of the upward pressure on crude prices. However, the risk of shipping disruptions in the Middle East remains the dominant factor influencing the market.
Overall, oil prices ended July with strong gains as the widening regional conflict threatened several major energy routes. Future price movements will likely depend on developments in the Strait of Hormuz, diplomatic negotiations and the security of shipping corridors across the Middle East.
