US-Iran war: Oil prices have witnessed sharp swings over the past two weeks, easing to below $72 a barrel and offering markets some relief before rebounding strongly to surpass $85 a barrel amid the ongoing US-Iran war.
Brent Crude futures jumped more than 18% from its early July, reaching around $87 a barrel, its highest level in more than a month. On the other hand, WTI (West Texas Intermediate) also rallied sharply, rebounding to nearly $80 a barrel.
On Wednesday, oil prices continued to rise after President Donald Trump reinstated a naval blockade on all Iranian ports, while Tehran responded by launching strikes on US infrastructure in the region.
Brent crude futures were up 58 cents, or 0.7%, at $85.31 per barrel, while U.S. West Texas Intermediate (WTI) crude futures gained 35 cents, or 0.4%, to trade at $79.69 a barrel, on 15 July.
What’s driving crude oil prices?
US President Donald Trump was quoted as saying by Fox News that Washington will continue its military strikes on Iran and could target power plants and bridges next week if Tehran does not return to the negotiating table.
The US also launched another round of attacks on Iran, striking several military targets near the Strait of Hormuz and along the country’s coastline. According to the US Central Command, the seven-hour operation was aimed at further weakening Iran’s ability to threaten commercial shipping and civilian vessels.
Meanwhile, the US resumed its blockade at 4 p.m. New York time, about an hour after the strikes began. However, Trump later withdrew a proposal announced a day earlier to impose a 20% fee on cargo passing through the Strait of Hormuz.
The decision offered relief to global shipping companies, which had been unsettled by the collapse of the US-Iran ceasefire and fears of further disruptions at the world’s most critical energy chokepoint. Around one-fifth of global crude oil and liquefied natural gas shipments pass through the strait, and continued tensions have raised concerns over higher oil prices as Iran maintains its control over the vital waterway.
Can Brent Crude surpass $100 per barrel mark?
Aamir Makda, Commodity & Currency Analyst at Commodity Technical Research, Choice Broking, believes that as tensions rise between the US and Iran, global crude oil prices may exceed $100 per barrel, moving from a speculative concern to a likely scenario.
Makda explained that prices reflect psychological risk premiums, with the Strait of Hormuz’s vulnerability playing a critical role in this shift. A military confrontation affecting navigation could trigger speculative buying, pushing Brent crude prices above $100 and creating stagflation risks.
“Should the US-Iran situation escalate, an initial price spike would follow the removal of Iran’s production capacity, leading to a tight energy market. Over the medium term, global safety net limitations will impact prices, with low US Strategic Petroleum Reserve levels reducing the ability to offset disruptions. Without a diplomatic or OPEC+ response, long-term prices will stabilize at higher levels, resulting in persistent energy cost volatility,” he added.
Meanwhile, Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities, said that crude can test $100, but it requires a prolonged full stoppage of Hormuz traffic or an attack on the Saudi–UAE bypass routes — not just the current skirmishes.
At $85–86, Brent already reflects tanker traffic collapsing to barely 57 weekend transits against 130 a day pre-war. Our base case is an $80–90 band with spikes above $90 on fresh vessel attacks, Banerjee highlighted.
“The risk is that inventories and strategic reserves are far thinner than in March–April, so a full re-closure would transmit into prices faster — and $100 would be crossed quickly. Not our base case, but no longer a remote tail either,” he said.
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