LONDON, July 9, 2026, 11:56 BST
Oil hovered just below $78 a barrel on Thursday. A new U.S.-Iran spat shook up some nerves but didn’t drive traders to rethink Gulf risk. Front-month Brent was last at $78.11 at 11:19 BST, 9 cents higher. U.S. West Texas Intermediate traded at $73.49 at 5:56 a.m. EDT, down 3 cents.
This is now a physical issue, not just something on the charts. Some war underwriters — insurers who cover conflict risks — told shipowners to hold off on sailing through the Strait of Hormuz. That’s a key route for about a fifth of global oil and LNG before the Iran war. Tim Waterer at KCM Trade said traders think “things are very much up in the air.” Aneeka Gupta from WisdomTree said Brent has a “mild upward bias.” Reuters
U.S. Central Command said its forces struck over 80 targets in Iran on July 7 after three commercial ships came under attack in the strait. CENTCOM said it hit air-defense positions, coastal radar, anti-ship missile systems, and more than 60 small boats run by the Islamic Revolutionary Guard Corps.
Markets held a war premium, but no panic buying showed up. Brent finished 5.2% higher at $78.02 on Wednesday, the highest level since June 19. WTI climbed 4.4% to $73.52, though both benchmarks came off bigger intraday highs after President Donald Trump said he would not start a full-scale war with Iran. According to Jorge Leon at Rystad Energy, the latest moves “significantly weaken any confidence” in the truce. Reuters
U.S. stocks didn’t give bulls much to go on. The Energy Information Administration reported commercial crude inventories rose 3.0 million barrels to 411.4 million for the week ending July 3. Gasoline stocks fell by 1.9 million, while distillate inventories, which include diesel and heating oil, dropped 5.0 million barrels.
Russia put a diesel export ban in place until July 31, stepping up pressure on the refined-products market. Moscow moved after Ukrainian drones hit Russian refineries and domestic fuel supplies got tight. Abhishek Kumar at Sparta Commodities called the ban “almost the worst possible time.” Reuters
The overall outlook remains tilted to the downside, as Gulf supply shows signs of recovery. In its July report, the EIA slashed its Brent forecast for Q3 to $74 a barrel, a cut of $27 from June numbers, and now sees prices at $65 in 2027. The agency cites an expected build in oil inventories next year.
OPEC+ is adding to the pressure. The group agreed to lift output targets by 188,000 barrels a day starting in August. But Reuters said most of that increase hasn’t materialized with Hormuz disruptions holding back exports from the main Gulf exporters. UBS analyst Giovanni Staunovo said the near-term focus is “how many tankers will manage to cross.” Reuters
WTI, the nearest U.S. equivalent to Brent, has moved on the same Gulf-risk theme, but its price is still influenced by local stockpiles and refinery demand. Diesel prices have become the more immediate problem for shippers and refiners, as Russian export controls hit while security fears in Middle East shipping put pressure on finding enough supply.
The risks here are clear and tough. If talks break down, tanker attacks get worse, or insurers scale back, the market might shift from fear to pricing in real supply loss. XS.com’s Samer Hasn said the “diplomatic path to settlement is still very long.” The Wall Street Journal
Right now, traders are pricing uncertainty, not a closed strait. Oil sits between the risk of a sudden Hormuz premium and a supply recovery that keeps dragging Brent back toward the mid-$70s.
