Brent crude futures have surged beyond the $80–$90 range, approaching $92 per barrel as geopolitical disruptions in key transit routes amplify supply concerns. The rally follows the expiration of a 60-day US-Iran ceasefire, which Washington declined to extend, while Tehran escalated threats and seized a tanker in the Strait of Hormuz. Houthi attacks on oil infrastructure in the Red Sea have further constrained regional exports, compounding market tightness.
Transit volumes through the Strait of Hormuz have plummeted from pre-war levels of 18 million barrels per day (bpd) to 4.9 million bpd, according to data from Kpler. Middle East oil exports have similarly declined from 21 million bpd to 9.5 million bpd. Bloomberg cited an insider claim that actual transit volumes may exceed Kpler’s estimates, while the US Department of Energy reported a figure of 9 million bpd, reflecting adjustments for alternative routes and the so-called "shadow fleet."
The tightening supply backdrop has reignited discussions about Brent crude potentially revisiting the $100-per-barrel threshold. Initial market speculation had earlier posited North Sea crude could reach $150 per barrel under extreme conditions. However, analysts caution that such scenarios remain contingent on sustained disruptions and geopolitical escalation.
Macroeconomic factors are also influencing oil price dynamics. The probability of a Federal Reserve rate hike in September has fallen to 34%, easing pressure on the US dollar and supporting crude prices. By contrast, the likelihood of a hike by the end of 2026 has moderated to 64%, down from earlier projections. Geopolitical risks have since pushed the probability of a 2026 tightening back to 70%, according to market pricing.
On the supply side, the US strategic petroleum reserves have declined to their lowest level since 1982, with a loss of 5.3 million barrels recorded in the prior week. The depletion underscores the strain on emergency stockpiles amid prolonged global supply constraints.
