LONDON, July 31, 2026, 12:04 BST
- Market update: Brent and WTI futures traded during European hours.
- As of 0952 GMT, Brent was at $89.50 and WTI stood at $83.63.
- Initial estimate shows Brent’s premium over WTI expanded by roughly 60% in July.
Oil prices held steady on Friday, while the focus was on the gap between major benchmarks. Brent traded at a premium of roughly $5.87 a barrel over WTI.
Based on the reported rounded monthly increases, the spread was about $3.67 at the beginning of July. The preliminary estimate indicated an implied increase of approximately 60%.
The shift highlights increased value being placed on maritime supply and the safety of shipping routes. Brent remains the primary global benchmark for seaborne crude, while WTI sets pricing domestically in the U.S. The price difference is especially relevant for refiners who rely on imported shipments.
| Metric | July 31, 0952 GMT | Implied July start | Change |
|---|---|---|---|
| Brent crude | $89.50 | $73.36 | +22% |
| WTI crude | $83.63 | $69.69 | +20% |
| Brent-WTI premium | $5.87 | $3.67 | Roughly +60% |
Initial estimates are based on rounded returns for the month so far.
Market activity on Friday was steadier, reflected by current flows. Two very large crude carriers, each holding approximately two million barrels, passed through Hormuz. Four commodity ships made their way out, compared with three the previous day.
Commonwealth Bank of Australia ASX:CBA puts current traffic at 30% to 35% of levels seen before the conflict. This improvement may help limit further price increases, but it does not bring capacity back to typical levels.
Ole Hvalbye, an analyst at Skandinaviska Enskilda Banken (STO:SEB-A), said, “The market has stopped trading the war and started trading the shipping data.” Reuters
Tankers have already diverted more crude oil to Egypt, with SUMED shipments increasing to 28.79 million barrels in July, up from 19.52 million in April. The share of Yanbu loadings sent south fell to 43%, compared with 81% in June.
| Shipping indicator | Latest | Comparator | Difference |
|---|---|---|---|
| Hormuz commodity vessels | 4 on Friday | 3 on Thursday | +1; traffic remains light |
| SUMED crude loadings | 28.79 million barrels | 19.52 million in April | +47.5% |
| Yanbu loadings heading south | 43% | 81% in June | -38 percentage points |
| Sidi Kerir weekly lift rate | 1.4 million bpd | 2.5 million-bpd capacity | 56% of capacity used |
The Suez route is slower and less efficient operationally. Using it for Northeast Asia shipments increases transit times by over double, with arrivals potentially pushed back by around a month. Fully loaded VLCCs are required to transfer part of their cargo to SUMED.
During the first half of 2025, 20.9 million barrels per day moved through Hormuz, accounting for nearly 20% of worldwide petroleum-liquids use. Suez and SUMED are unable to handle volumes of this magnitude. As much as five million barrels per day in alternate supply routes could be threatened if an attack occurred near the canal.
Kpler analyst Matthew Wright stated, “Disruption to the Suez Canal would have an almost immediate impact on prices.” Reuters
Risk repriced rapidly on Wednesday. Brent surged 7.91% and WTI advanced 6.56%. U.S. equities declined following President Donald Trump’s pledge for additional strikes on Iran.
| Asset | Wednesday move | Detail |
|---|---|---|
| Brent crude | +7.91% | Closed at $90.74 |
| WTI crude | +6.56% | Closed at $84.46 |
| Dow Jones Industrial Average | -2.1% | Dropped 1,153 points |
| S&P 500 | -1.5% | Broad sell-off seen |
| Nasdaq Composite | -1.7% | Tech stocks lost ground |
Physical stocks have also become more limited. U.S. crude stocks dropped by 7.2 million barrels, reaching 404.5 million, marking their lowest point since 2018. Analysts projected a decrease of just 1.3 million barrels.
Consumers are experiencing the impact. The average price of U.S. gasoline reached $4.09 per gallon, reflecting a 37% increase since the onset of the war. China plans to raise gasoline and diesel price ceilings by 14% and 15%, respectively, compared to the final adjustment before the conflict.
On the downside, demand destruction and a later rebound in supply could offset gains. The U.S. Energy Information Administration projects that daily consumption will decrease by 1.2 million barrels in 2026. Inventories are expected to decline by 2.2 million barrels per day in the third quarter, then recover during the fourth quarter.
Brent trades at $89.50, roughly 21% higher than the EIA’s $74 forecast for the third quarter. This difference reflects a notable disruption premium that could narrow rapidly if shipping returns to normal.
Risks are present in both directions. Continued flow through Hormuz or a truce could significantly narrow the spread. A strike close to Suez might push Brent back to $100. The spread projection is still tentative, as monthly increases were approximated.
Short-term traders are focused on Oman-Iran negotiations and monitor daily ship movements. The upcoming U.S. petroleum stockpiles report is set for August 5.
Related articles: ASX:CBA
Is the Strait of Hormuz currently open, or is it effectively shut?
The route technically remains operational, but usual commercial flow has yet to resume. Kpler tracked four commodity vessels departing by early Friday, up from three on Thursday. Among them, two were VLCCs each transporting around two million barrels of crude. Prior to the conflict, daily departures typically ranged between 125 and 140 vessels. Iranian media stated two tankers had been stopped, with another four rerouted. AIS-dark journeys make it difficult to determine the exact figure. (Reuters)
What is the current level of oil prices, and what is the outlook for the near term?
Brent was at $89.50 and WTI at $83.63 by 09:52 GMT. Brent looked set for a 22% gain this month, with WTI up 20%. According to an analyst quoted by Reuters, Brent is likely to trade in a $80-$100 range in the short term, reflecting ongoing instability in shipping flows, continued negotiations, and recurring tanker attacks. A lasting reopening could weigh on prices, while further attacks might push Brent back to triple digits. (Reuters)
What proportion of the world's energy supply relies on the Strait?
In 2025, approximately 20 million barrels per day passed through Hormuz, making up about 25% of the world’s seaborne oil trade. Nearly 80% was shipped to Asia, with China, India, and Japan being the largest importers. Close to 93% of Qatari LNG and 96% of UAE LNG also pass through Hormuz, accounting together for 19% of global LNG trade. As a result, Asia faces physical and pricing pressures first. (IEA)
Is it possible for pipelines and rerouting to compensate for Hormuz supply losses?
Not completely. Pipelines in Saudi Arabia and the UAE can transport only between 3.5 million and 5.5 million barrels per day, equal to about 18% to 28% of the typical oil flow through Hormuz. Iran, Iraq, Kuwait, Qatar, and Bahrain do not have equivalent alternative export options. Even if rerouting is achieved, a significant logistical and physical gap remains. Shipments must also cover greater distances, which adds to fuel consumption, insurance costs and delays. (IEA)
What are the crude price implications of the latest IEA balance?
Global supply climbed by 4.1 million barrels per day in June, reaching 98.8 million. Output, however, stayed 9.4 million barrels short of pre-war figures. The IEA projects that supply in 2026 will decrease by 3.7 million barrels daily, falling to 102.6 million. Demand is also expected to drop by one million barrels each day. Demand is forecast to recover by more than eight million barrels per day from May to October. The outlook is based on a rapid de-escalation scenario; renewed conflict presents potential for higher prices. (IEA)
To what extent does LNG risk affect utility and gas shares?
The Strait of Hormuz is used for approximately 93% of Qatar's LNG exports and 96% of the UAE's LNG exports. Combined, these shipments account for about 19% of the world's LNG trade. Volatility provides opportunities for flexible trading portfolios, but importers encounter increased expenses. Engie reported a 3.3% increase in first-half earnings, supported by strong gas trading activity. Shares in the company rose 5% to €27.37, bringing year-to-date gains to 24%. This performance is specific to the company and does not eliminate the wider risk to supply. (IEA)
Which energy stocks on the market appear most favourably positioned?
Chevron is comparatively well positioned due to its limited Middle East production presence. The company posted adjusted earnings of $12 billion, equal to $6.06 per share. Upstream profits surged to $8.2 billion, and output climbed to four million boepd. Ahead of Friday’s U.S. market open, Chevron shares were up about 3%. Most recent quotes put Chevron at $192.31 and XLE at $58.96. Refiners are also seeing gains; diesel margins reached $74.66, while jet margins moved above $80. (Reuters)
Do tanker and shipping stocks offer direct exposure to the Hormuz trade?
Not completely. ADNOC acquired five VLCCs from Frontline for approximately $590 million, averaging close to $118 million per ship. ADNOC has also chartered around 25 tankers and placed orders for 25 to 30 more vessels. These actions indicate tight secure capacity and notably high strategic demand. Frontline's most recent quote stood at $39.10, while Okeanis was at $59.86. War-risk insurance neared 3%, with a reopening having the potential to quickly drive charter rates lower. (Reuters)
Which sectors and indices are most exposed to potential downside?
Airlines face ongoing pressure as they contend with both rising jet fuel prices and declining demand. IAG reported a 16% drop in second-quarter operating profit to €1.41 billion. Expenditure on fuel and emissions increased about 23% to €2.22 billion. United forecasts almost $6 billion more in fuel expenses for this year. The latest prices showed JETS trading at $31.68, with SPY near $741.69. S&P 500 futures advanced 0.35%, buoyed by solid technology sector results. Any renewed halt to shipping would challenge the index's strength. (Reuters)
Which 30-to-90-day market scenario is the most defensible?
Brent is expected to fluctuate between $80 and $100 in the base scenario, with the main risk to the upside occurring if daily transits drop to single digits. A persistent security pact could see Brent fall below $80. Gulf exports rose to 16.1 million barrels per day after the partial reopening in June, sending North Sea Dated up to $68 by early July. Forecast certainty is limited, as changes in transit volumes, insurance, and diplomatic efforts remain unpredictable. (IEA)
