Oil Extends Third-Day Rally Amid Escalating U.S.-Iran Tensions

VG Markets · 2026-07-15T07:42:31Z
Oil Extends Third-Day Rally Amid Escalating U.S.-Iran Tensions

Oil prices rose for a third consecutive session during Asian trading on Wednesday, with Brent crude futures gaining 1.7% to US$86.15 per barrel and WTI rising 1.3% to US$80.34, as geopolitical tensions between the United States and Iran remained elevated. Both benchmarks traded near one-month highs after gaining nearly 10% since the beginning of the week.

Latest statements

In a Fox News interview aired on July 14, U.S. President Donald Trump said military operations could intensify if negotiations with Iran do not resume. He also stated that additional infrastructure could become military targets while adding that energy facilities were being spared for the time being. Trump said U.S. officials remain in contact with Iranian counterparts regarding possible negotiations.

Recent developments

  1. The United States announced additional measures affecting Iranian shipping through the Strait of Hormuz.
  2. Trump also said he had withdrawn a previously proposed 20% transit fee on commercial cargo using the Strait of Hormuz following discussions with Gulf partners.
  3. Shipping activity in the area has reportedly slowed amid ongoing regional security concerns.

Market outlook

Market participants continue to compare recent geopolitical developments with the U.S. Energy Information Administration's (EIA) July 7 Short-Term Energy Outlook, which projected Brent crude prices easing toward US$70 per barrel by the fourth quarter of 2026 under assumptions of improving supply conditions and rebuilding inventories. Recent geopolitical developments have increased uncertainty around that outlook.

Meanwhile, data released by the American Petroleum Institute (API) showed U.S. crude inventories declined by 56,000 barrels last week, below market expectations for a draw of approximately 2.7 million barrels. Investors are awaiting the official weekly inventory report from the EIA for additional insight into supply conditions.

Market focus

Some market participants believe current oil prices continue to reflect elevated geopolitical risk. Future price movements will likely depend on both developments in regional security and incoming energy market data.