Oil prices hit one-month high as U.S.-Iran conflict intensifies

Global crude oil prices extended their rally into a fourth consecutive session on Wednesday as the reimposition of a U.S. naval blockade on Iranian ports and continued American strikes on Iranian military targets deepened fears of prolonged supply disruptions through the Strait of Hormuz.

Brent crude rose 0.9% to around $85.52 a barrel by early Wednesday, while West Texas Intermediate climbed 0.6% to $79.86, with both benchmarks reaching their highest levels in a month, according to Reuters. The gains followed three straight days of advances driven by an escalating military confrontation between Washington and Tehran.energynow

Blockade and Strikes Fuel Supply Fears

The U.S. Navy reimposed its blockade against Iranian ships on Tuesday on the orders of President Donald Trump, U.S. Central Command said in a statement, covering Iran's ports and terminals along its entire southern coastline. The move came after the U.S. military carried out strikes on Iran for a third consecutive night, targeting coastal military installations at Bushehr, Chah Bahar, Jask, and Bandar Abbas.centcom+2

Iran's Islamic Revolutionary Guard Corps responded by attacking at least two oil tankers in the Strait of Hormuz, killing one mariner and injuring several others aboard vessels belonging to the UAE's state oil company ADNOC. Tanker traffic through the strait fell to just six vessels on Sunday, the lowest level in five weeks, according to data from maritime tracking firm Kpler.cnbc+2

Goldman Sachs The Goldman Sachs Group, Inc. ↘ 1.26% warned in a note on Tuesday that Brent could exceed $110 a barrel in the fourth quarter if the Gulf export recovery continues to stall. The bank estimated that Persian Gulf exports, which had recovered to more than 80% of pre-war levels following a U.S.-Iran memorandum of understanding in June, slipped back below 50% — approximately 11 million barrels per day — within a week of renewed attacks.discoveryalert+1

Inventory Data and Market Outlook

U.S. crude inventories fell by 1.69 million barrels in the week ending July 10, a smaller draw than expected, but the geopolitical risk premium overshadowed bearish demand signals. The EIA had previously reported a larger draw of nearly 3 million barrels the prior week.tradingeconomics+1

Goldman Sachs maintained its base-case forecast of $80 per barrel for Brent in the fourth quarter but acknowledged two-sided risks, noting prices could fall into the $60s if tensions ease rapidly. The bank estimated that the reinstated blockade alone could cut Iranian exports by 1.5 million to 2 million barrels per day.energynow

American drivers are already feeling the impact. Reuters Thomson Reuters Corporation ↗ 5.20% reported that the national average gasoline price reached $3.84 a gallon, up nearly 10 cents in a week, with GasBuddy analyst Patrick De Haan warning it could top $4 within days.reuters