Oil prices increased on Thursday 30 July during a turbulent trading session as investors weighed renewed US military action against Iran against the potential for an agreement that could restore shipping through the Strait of Hormuz.
By 08:12 GMT, Brent crude had risen by $1.06, or 1.17%, reaching $91.80 a barrel (bbl), reported Reuters.
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Meanwhile, US West Texas Intermediate (WTI) crude had gained $0.39, or 0.46%, to $84.85/bbl.
Both crude benchmarks had previously erased losses after experiencing sharp rises of around 7–8% on Wednesday, which followed threats from US President Donald Trump to strike Iran “very hard” after an Iranian missile was fired at a US base in Jordan.
The previous day, the US and Saudi Arabia jointly targeted Iran-backed paramilitary groups in Iraq in response to drone attacks on Saudi oil sites.
The strikes marked the first public participation of Saudi Arabia in such operations. This brought an end to a short pause in US military actions against Iran that began over the past weekend.
Additional strain on global oil supplies emerged when the Caspian Pipeline Consortium suspended oil loadings following a drone attack on a tanker, according to Russia’s Interfax news agency.
Disruption to regional exports also extended to the liquefied natural gas (LNG) market.
Qatari LNG shipments through the Strait of Hormuz were halted after Iran closed the channel, leading QatarEnergy to declare force majeure on deliveries.
According to four trade and industry sources cited by Reuters, QatarEnergy secured 33 spot LNG cargoes from the US this year, far exceeding last year’s four cargoes, to supply customers in South Korea, Taiwan, Bangladesh, India and Japan.
Around 80% of Qatar’s LNG exports are normally sent to Asian markets.
Meanwhile, INEOS received the first of two large modules at the Port of Antwerp for its €5bn ($5.7bn) Project ONE ethane cracker.
The modules, constructed in Abu Dhabi, had been delayed for months, trapped in the Strait of Hormuz due to conflict-related blockades.
The first unit, weighing 6,920t and standing 55m tall, arrived via the Suez Canal following a temporary ceasefire in mid-June.
The final module, at 7,200t, is expected soon to complete the plant’s construction.
While supply concerns in the Gulf have dominated headlines, developments in China have also played a significant role in shaping the recent oil market response.
TS Lombard’s Rory Green wrote in a report that China was arguably a major reason the Iran war-related jump in oil prices never approached the $200/bbl levels some had feared.
Chinese crude import volumes fell to ten-year lows with little apparent hit to domestic activity, thanks to widespread electrification, state stockpiles, sizeable commercial inventories of refined products and some demand destruction.
Refined-product inventories remain roughly 50% above pre-Covid levels, allowing industry to run down stocks with limited impact on prices or growth. High-frequency data indicates flows are now picking up again and shifting geopolitics plus infrastructure spending could push imports higher.
