Oil posts massive weekly gains as three chokepoints face simultaneous disruption

Simultaneous disruptions across the Red Sea, the Strait of Hormuz, and the Black Sea are threatening an unprecedented share of global oil supplies, sending crude prices toward their largest weekly gains in months even as a late-week pullback tempered the rally.

A "Two-Chokepoint" Crisis Becomes Three

The week's upheaval began when Yemen's Houthi militants claimed attacks on two Saudi oil tankers in the Red Sea on Tuesday, days after announcing a naval blockade against Saudi vessels. The Washington Post News Corp ↗ 1.48% reported that at least one tanker was confirmed struck, widening energy supply risks already elevated by a near-halt to shipping through the Strait of Hormuz. The Iran-backed group's escalation effectively created what analysts described as a "two-chokepoint" risk that compounded existing Hormuz disruptions caused by the ongoing US-Iran conflict.washingtonpost+4

In the Black Sea, Ukrainian drone strikes on tankers loading at the Caspian Pipeline Consortium's marine terminal forced a full shutdown of the 1.5 million barrel-per-day system. Reuters ↗ 5.20% reported on July 21 that CPC stopped accepting Kazakh crude after four tanker attacks in as many days. Kazakhstan subsequently reduced oil production to prevent storage facilities from overflowing.spglobal+2

Russia's Refining Losses Tighten Product Markets

Adding to crude supply pressure, Ukraine's systematic strike campaign has disabled over 40% of Russia's oil refining capacity, according to data released by the General Staff of the Armed Forces of Ukraine. The International Energy Agency lowered its Russian production forecast for 2026 and 2027 in its July report, now expecting output to average 8.9 million barrels per day this year. A March analysis by maritime intelligence firm Windward estimated that combined disruption potential across all three chokepoints approached 27 million barrels per day.kyivpost+3

Prices Rally, Then Retreat on Diplomacy Hopes

Brent crude remained on course for a weekly gain exceeding 10% despite easing on Friday, when reports emerged of renewed Chinese diplomatic efforts to broker an end to the US-Iran war. China has urged both sides to implement the memorandum of understanding signed by President Trump and Iranian President Masoud Pezeshkian in mid-June, which opened a 60-day negotiating window. Goldman Sachs The Goldman Sachs Group, Inc. ↘ 1.26% warned that if disruptions to key transit corridors persist, Brent could breach $120 a barrel later this year.reuters+2