Oil prices surged approximately 2% on Tuesday, July 21, 2026, reaching a five-week high amid escalating Middle East tensions following overnight US military strikes on Iranian targets and a Houthi naval blockade declaration against Saudi Arabia. Brent crude futures climbed $2.12, or 2.4%, to $91.34 per barrel as of 10:53 am EDT, putting the benchmark on course for its highest closing level since June 10. US West Texas Intermediate crude rose $1.80, or 2.2%, to $85.03 per barrel, its highest level since June 11.
Brent was also technically overbought for the seventh consecutive session, according to data cited by Marine News Magazine, sourcing Reuters. The price rally was driven by a sharp deterioration in the geopolitical landscape across the Middle East. US forces conducted overnight bombing raids against Iranian targets in western and southern Iran, while Iran retaliated by striking US-linked sites in Bahrain, Kuwait, and Jordan.
At least one tanker in the Strait of Hormuz was also reported hit during the hostilities. Yemen's Houthi movement, aligned with Iran, declared a full naval blockade against Saudi Arabia on Monday, dramatically broadening the scope of the conflict beyond the Gulf and raising fresh concerns over the security of critical global energy transit routes. In response, two oil tankers that had loaded Saudi crude destined for China and India reversed course in the Red Sea, turning back toward the Suez Canal.
Shipping data from LSEG confirmed the U-turn. Saudi Arabia's Red Sea port of Yanbu was reported to be operating normally, according to sources cited by Reuters. SEB Research offered a cautiously optimistic reading of the situation, suggesting the latest American strikes could represent a final effort to strengthen Washington's negotiating position before a deal is reached and the Strait of Hormuz reopened.
However, the research firm also warned of the risk of a prolonged stalemate characterized by continued uncertainty in energy flows, elevated oil prices, and repeated military exchanges. Tim Waterer of KCM Trade underscored the significance of the Houthi blockade threat, noting that targeting Saudi Arabia raises the risk of disruption to yet another major oil exporter. Fuel oil markets in Asia extended gains on Tuesday in response to the intensifying threat posture.
Adding further pressure to the supply outlook, data released Tuesday by the Joint Organizations Data Initiative (JODI) showed that Saudi Arabia's crude oil exports fell for the third consecutive month in May, reaching a new record low. On the US domestic front, the American Petroleum Institute released its weekly storage report on Tuesday. Analysts estimated that energy companies drew down approximately 0.5 million barrels from storage in the week ending July 17, which would mark a second consecutive week of inventory declines.
By comparison, the same week last year saw a draw of 3.25 million barrels, while the five-year average decline for that period, covering 2021 through 2025, stood at 1.2 million barrels. The US Energy Information Administration was scheduled to publish its own inventory figures on Wednesday. Source: Marine News Magazine / Reuters.
Reporting by Scott DiSavino, Stephanie Kelly, Anushree Mukherjee, Ishaan Arora, and Emily Chow in Singapore. Editing by David Goodman and Emelia Sithole-Matarise.
Source: marinelink.com