Brent Surges 13.6% to $86.38, WTI Jumps 13.3% as US-Iran Conflict Disrupts Hormuz Shipments

Mumbai, July 18: Crude oil prices recorded their sharpest weekly advance since April, with both Brent and WTI benchmarks surging over 13% during the week ended 17 July, as escalating military confrontation between the United States and Iran severely disrupted shipments through the Strait of Hormuz, a critical chokepoint for approximately one-fifth of the world’s oil and liquefied natural gas trade.  

International benchmark Brent crude traded at $86.38 per barrel at the end of the week, up 13.6% from last Friday’s close of $76.01, while US benchmark West Texas Intermediate (WTI) traded at $80.94 per barrel, rising 13.3% from $71.41 a week earlier. The rally came as shipping traffic through the Strait of Hormuz slumped, with confirmed crude and condensate transit through the waterway falling 62% to 4.1 million barrels per day. 

Oil Jumps 4% as US-Iran Strikes Resume, Brent Hits $79.11 

The week opened with a jolt as oil prices surged over 4% on Monday following renewed military strikes between the United States and Iran over the weekend. Brent crude futures climbed $3.10, or 4.08%, to $79.11 by 0325 GMT, while WTI crude rose $2.95, or 4.11%, to $74.36 a barrel.  

US forces completed another wave of strikes against Iran on Sunday, hitting dozens of targets with precision munitions, while Iran’s Revolutionary Guards attacked US military bases in Kuwait and Bahrain. Iran declared the closure of the Strait of Hormuz “until further notice,” although US officials disputed the claim.  

The escalating attacks cast further doubt on the future of an interim US-Iranian agreement signed last month that aimed to reopen the strait. ANZ analysts noted in a note that “hopes of a relatively quick resolution to the recent skirmishes may be in doubt after tension escalated over the weekend”. 

Brent Surges Past $86 on Tanker Attacks, Settles at $84.73 

Oil prices continued their upward trajectory on Tuesday, hitting a one-month high as the conflict deepened. Brent crude futures rose $1.43, or 1.7%, to settle at $84.73 per barrel, while WTI crude gained $1.20, or 1.5%, to settle at $79.34 per barrel. During early European trading, Brent briefly touched above $86 per barrel after an attack on two tankers linked to the United Arab Emirates in the Strait of Hormuz.  

The United States reimposed a maritime blockade on Iranian ports, while Iran warned of further restrictions on regional energy exports. The rally was also supported by fresh US strikes on Iranian coastal defence systems and missile sites. For the second straight session, crude prices extended gains as investors priced in a higher geopolitical risk premium. 

Brent Holds Above $85 as Iran Threatens Red Sea Closure 

Oil prices extended gains for a third consecutive session on Wednesday, with Brent holding above $85 per barrel. Brent crude futures rose 58 cents, or 0.7%, to $85.31 per barrel, while WTI crude gained 35 cents, or 0.4%, to trade at $79.69 a barrel.  

The rally intensified as Iran reportedly directed Yemen’s Houthi rebels to be ready to close the Bab el-Mandeb Strait, a critical route for Saudi Arabia’s oil exports through the Red Sea, if the United States attacked Iranian power infrastructure. The US launched two large waves of air strikes on Iran in a single day on Wednesday, the first time it had done so since last month’s truce.  

Tehran launched strikes against several countries across the Gulf and wider region, with state media reporting that the US had hit civilian infrastructure including bridges, a train station and an airport. An oil tanker near Iran’s main export terminal was hit for the first time since the reimposition of the blockade. 

Brent Rises to $85.28 as Conflict Intensifies for Fourth Day 

Crude prices extended gains for a fourth consecutive session on Thursday as fresh US strikes on Iranian military targets heightened concerns over supply disruptions. Brent crude futures rose 33 cents, or 0.4%, to $85.28 a barrel, while WTI crude gained 42 cents, or 0.5%, to $80.02 a barrel.  

The US on Wednesday targeted Iran’s coastal defence systems and missile sites after reimposing a naval blockade on Iranian ports. In response, Iran warned that it could further restrict regional energy exports, saying it was fighting an “existential war” against the US. Goldman Sachs warned that Brent crude could climb above $110 per barrel in the fourth quarter if the recovery in Gulf exports remains delayed. However, the investment bank also noted that prices could fall into the $60s by year-end if geopolitical tensions ease and production rebounds more quickly than anticipated.  

Meanwhile, India’s Directorate General of Shipping ordered shipowners and recruitment companies against deploying Indian seafarers on vessels undertaking voyages through the Strait of Hormuz, with more than 15,000 Indian seafarers still stranded on the west of the strategic waterway. 

Brent Heads for 13.6% Weekly Gain as Oil Trades at $86.38 

Oil prices traded higher on Friday, heading for a sharp weekly gain as escalating Middle East tensions continued to dominate sentiment. Brent crude futures were up 1.2% at $85.24 a barrel and headed for a weekly gain of more than 10%, while WTI crude futures surged 1.6% to $80.17. By the end of the week, Brent had climbed 13.6% from the previous Friday’s close to $86.38, while WTI had risen 13.3% to $80.94.  

The gains came as the US launched a sixth night of strikes on Iran, with Tehran responding with attacks targeting US-linked military facilities and strategic assets in the Gulf region. The Joint Maritime Information Center raised its regional threat level for the Strait of Hormuz to “severe” following the collapse of the ceasefire and a wave of hostile attacks on merchant vessels. Iran’s Revolutionary Guards reportedly hit targets in Oman, Kuwait and Bahrain amid an expanding regional confrontation. Analysts said the possibility of attacks on energy facilities in the Gulf significantly increased the geopolitical risk premium in crude markets, with some warning that a broader disruption to regional oil flows could push Brent prices toward $100 per barrel. 

Petrol, Diesel Prices Remain Unchanged Despite 13% Weekly Crude Surge 

Despite the sharp rally in global crude prices, retail petrol and diesel prices in India remained largely unchanged across all major cities throughout the week, as state-run oil marketing companies (OMCs), Indian Oil, Bharat Petroleum and Hindustan Petroleum, held pump rates steady at levels set after the late-May hike. The decision to maintain prices came even as Brent crude headed for its biggest weekly advance since April, with international benchmarks surging over 13% amid escalating US-Iran tensions and disruptions to Strait of Hormuz shipments. 

Throughout the week petrol and diesel prices showed no significant variation across listed cities. At the beginning of the week, petrol in Delhi was priced at ₹102.12 per litre, and it remained at the same level on Friday. Similarly, Mumbai’s petrol price held steady at ₹111.18 per litre, with a negligible decline of just 3 paise recorded on Friday. Kolkata’s petrol price remained unchanged at ₹113.47 per litre, while Chennai’s petrol held at ₹107.77 per litre throughout the week. Bengaluru’s petrol remained stable at ₹110.93 per litre, and Hyderabad’s petrol maintained its position at ₹115.69 per litre. Chandigarh continued to offer the lowest petrol price among major cities at ₹98.10 per litre. Petrol prices remained the highest in Hyderabad at ₹115.69 per litre, followed closely by Thiruvananthapuram at ₹115.49 per litre. 

Diesel prices also demonstrated remarkable stability across the week. New Delhi’s diesel price remained unchanged at ₹95.20 per litre, while Mumbai’s diesel held steady at ₹97.83 per litre and Kolkata’s diesel remained at ₹99.82 per litre. Chennai’s diesel price stayed at ₹99.55 per litre, Bengaluru’s at ₹98.80 per litre, and Hyderabad’s at ₹103.82 per litre. Chandigarh had the lowest diesel price at ₹86.09 per litre, while Thiruvananthapuram recorded the highest at ₹104.40 per litre. Throughout the trading week, no city recorded any upward revision in fuel prices, reflecting the OMCs’ decision to absorb the impact of rising crude costs rather than pass it on to consumers. 

Government Raises Windfall Tax on Diesel, ATF Exports Amid Oil Surge 

The Indian government responded to the sharp rise in global crude prices by adjusting windfall taxes on fuel exports. Effective 16 July, the government raised the Special Additional Excise Duty (SAED) on diesel exports to ₹15.5 per litre from ₹8.5 per litre, while the levy on aviation turbine fuel (ATF) exports was increased to ₹14.5 per litre from ₹7.5 per litre. The duty on petrol exports, however, was reduced to ₹2.5 per litre from ₹4 per litre. The revisions followed a sharp rise in global crude oil prices triggered by escalating geopolitical tensions in the Middle East. 

Crude oil prices recorded their sharpest weekly advance since April, with Brent surging 13.6% to $86.38 and WTI jumping 13.3% to $80.94, driven by escalating US-Iran conflict and severe disruptions to Strait of Hormuz shipments. Despite the rally, retail petrol and diesel prices remained unchanged across major Indian cities, with Delhi petrol at ₹102.12 and diesel at ₹95.20 per litre. The government raised windfall taxes on diesel and ATF exports effective 16 July. Key triggers to monitor include US-Iran conflict developments, Strait of Hormuz traffic, Bab el-Mandeb Strait risks, and OPEC+ supply responses.