Oil Jumps as Mideast Tensions Rekindle --- Crude futures surged more than 7% after renewed fighting undermines talks

 

 

“Oil prices surged more than 7% after a fresh round of fighting across the Middle East undermined diplomatic efforts to end a five-month-old conflict that has roiled energy markets and disrupted flows through two of the world's most critical oil-shipping routes.

 

The front-month Brent crude contract rose 7.9% to $90.74 a barrel in U.S. trading on Wednesday, while West Texas Intermediate futures were up 6.6% at $84.46 a barrel following a sharp selloff earlier this week.

 

Shipping through the Strait of Hormuz remains severely constrained. According to Kpler, average weekly crude flows fell to 2.57 million barrels a day in the week beginning July 20, down roughly 61% from 6.60 million barrels daily in the week beginning July 6.

 

Data from the Energy Information Administration on Wednesday showed U.S. commercial crude oil inventories fell by 7.2 million barrels last week because of lower crude imports, higher exports and stronger refinery demand, with refineries operating at more than 97% of capacity.

 

Attention is turning to a meeting of key members of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, on Sunday. The group is expected to approve another production increase of about 188,000 barrels a day for September, matching the hikes agreed for June, July and August, according to some market watchers.

 

The September rise would complete the phased unwinding of 1.65 million barrels a day of voluntary supply cuts originally agreed upon in 2023, when the group still included the U.A.E., which left OPEC this year.

 

About 2 million barrels a day of separate OPEC+ production cuts introduced in 2022 will remain in place through the end of 2026. The alliance is reviewing members' production capacity to establish 2027 output baselines, which would determine future quotas, but the conflict in the Middle East likely has complicated the assessment.

 

While planned supply increases might not fully materialize because of supply disruptions in the Gulf, they have the potential to alter the oil market balance next year.

 

"The big uncertainty through 2027 will be around the group's policy, with the potential for pushback on output quotas," ING analysts said. "Particularly given the disruptions that a number of producers have faced this year."” [1]

 

1. World News: Oil Jumps as Mideast Tensions Rekindle --- Crude futures surged more than 7% after renewed fighting undermines talks. Petroni, Giulia.  Wall Street Journal, Eastern edition; New York, N.Y.. 30 July 2026: A6.