Oil Prices Soar on Iran-US Tensions
Oil prices surged to a two-month high in July due to diplomatic tensions between Iran and the US, which reversed course after the breakdown of their ceasefire agreement. Benchmark crude prices reached $105/bbl on July 23, but have since dropped to around $92/bbl as uncertainty prevails.
The Gulf's oil production increased by 2.5 mb/d in July, but regional exports fell sharply due to attacks on oil infrastructure and tankers. The Strait of Hormuz was effectively closed again in early July, disrupting international supply chains and curtailing product availability.
Global oil demand is now expected to decline by an average of 1.6 mb/d this year, with the second half of 2026 projected to see a reduction of roughly 550 kb/d. Product markets remain tight, pushing Atlantic Basin refining margins to all-time highs in July as diesel, jet fuel and gasoline cracks surged.