Global oil benchmarks posted their largest monthly advance since March, with Brent crude climbing more than 20% in July and West Texas Intermediate gaining a similar margin. On the final trading day of the month, Brent for October delivery settled at $87.93 a barrel on the Intercontinental Exchange, while September WTI on the Nymex ended at $84.67, even as both contracts recorded weekly losses.

The rally was fuelled by an intensifying geopolitical risk premium. The Strait of Hormuz, a chokepoint for roughly a fifth of the world’s oil, remained severely disrupted. Iran’s Revolutionary Guard Corps stopped two tankers attempting to transit the waterway and forced four others to alter course, the Fars news agency reported. Although vessel-tracking data from Kpler showed that two supertankers carrying Persian Gulf crude did exit the strait on 31 July, overall traffic stayed heavily restricted. Simultaneously, Houthi rebels in Yemen widened their attacks on commercial shipping in the Red Sea, prompting Saudi Arabia to propose a multinational defence coalition to secure the Bab el-Mandeb strait and the Gulf of Aden.

Viewed from trading desks in London and Moscow, the market’s focus has shifted from the tempo of military clashes to hard shipping data. “The market has stopped reacting to the war and has begun to react to the data on maritime transport,” said Ole Hvalbye, an analyst at SEB Research. That data painted a picture of fragile supply lines: only 29 tankers transited Bab el-Mandeb the previous day, while the near-closure of Hormuz has drained inventories. Aaron Kildow of Sparta Commodities noted that US crude stocks at the Cushing delivery hub have fallen to their lowest since July 2014, leaving no cushion to absorb further disruptions. “Even if the situation in the Strait of Hormuz were resolved tomorrow, the market has already been so disorganised and stocks so consumed that it will take months, perhaps years, to rebuild them,” he said.

Additional supply pressures came from interruptions at the CPC export terminal in Kazakhstan and the steady decline in American petroleum inventories. Against this backdrop, BankPro’s chief executive Paolo Broccardo expects Brent to trade in a wide $80–$100 range, with price moves dictated by geopolitical headlines. BMI Research warned of “sudden and sharp changes in market fundamentals and the risk premium” as periodic US-Iran military encounters persist without a return to full-scale combat. The next milestone for traders will be any concrete movement on the US-Israeli land-blockade proposal reported by The Telegraph, as well as the outcome of Iran’s continuing talks with Oman over joint management of the Strait of Hormuz.