Oil climbs to six-week high after Iran dismisses peace talks
The surge has sent Brent futures to levels last seen in early June, before an interim Iran war peace deal that has now unravelled
Published Thu, Jul 23, 2026 · 06:19 AM
OIL climbed, extending this month’s price jump to nearly 30 per cent, as the US and Iran played down the prospect of peace talks and disruptions to global supplies continued to mount.
The surge has sent Brent futures to levels last seen in early June, before an interim peace deal that has now unravelled.
The global benchmark rose 3.4 per cent on Wednesday (Jul 22) to settle at US$94, the highest in more than a month, after briefly testing US$95 during the session.
Iran said there are currently no negotiations, and only an exchange of messages was possible, according to the Mehr news agency. Hostilities have escalated across the Middle East in recent days, with three tankers attacked in the Strait of Hormuz near Oman.
An unrelenting US military campaign against Iran, renewed Houthi threats to Red Sea shipping and disruptions at the Caspian Pipeline Consortium terminal on Russia’s Black Sea coast, which exports most of Kazakhstan’s oil, drove crude higher for the fourth consecutive session.
The commodity has repeatedly swung on signals of escalation and détente of the US-Iran conflict, driving volatility to its highest level since May and fuelling a record number of options trades.
US President Donald Trump said on Wednesday that the US would bomb a bridge or power plant for every ship shot at by Iran in Hormuz and vowed to respond if Teheran-backed Houthi rebels in Yemen disrupted shipping in the Red Sea, a key route bypassing the strait that millions of barrels of oil transit.
Some ships are pausing or reversing course in the waterway, while others continue transiting, casting a shadow of uncertainty over future crude supplies and prices.
“This latest escalation and throttling of flows by Iran has again opened the door to fatter right-tail scenarios the longer it goes on,” said Ryan McKay, a senior commodity strategist at TD Securities.
“CTAs have become modest buyers in Brent crude oil again at prices above US$93 a barrel, however volatility remains a major constraint,” he added, referring to commodity trading advisers.
The American military conducted an 11th straight day of attacks on the Islamic Republic in an effort to degrade the country’s abilities to threaten commercial shipping in the Strait of Hormuz, according to US Central Command.
The waterway remains open, despite Iranian aggression, it added. It could take months before the true impact on global crude is known.
If the Middle East conflict drags on and commercial inventories across the Organisation for Economic Co-operation and Development draw down further, Brent could breach US$100 a barrel before the end of 2026, according to a note from Bernstein.
Goldman Sachs Group has also flagged the possibility of prices returning to triple digits, although that is not the bank’s base case.
“It is obvious that there is a geopolitical premium to it,” Torgrim Reitan, chief financial officer of Equinor, said in a Bloomberg Television interview.
“This time around it is very different, because storage is down, there is no oversupply situation and the physical situation can easily be visible in the market.”
Key price indicators have surged in recent days, pointing to growing concerns about supply. Both Brent and WTI’s nearest timespreads are trading in a bullish backwardation structure of more than US$3 a barrel. In normal times that would be barely a few cents.
The Iran-backed Houthi militants have deployed missiles and drones in preparation for attacks on shipping, the Joint Maritime Information Center, a monitoring body for naval security, said in an alert late on Tuesday.
The Red Sea became a crucial export route for Saudi Arabia during the war, allowing the kingdom to redirect some flows via pipelines and bypass Hormuz.
Observed commercial vessel traffic through the narrow waterway near Iran has fallen to the lowest level in three weeks.
In the US, oil inventory data published on Wednesday by the Energy Information Administration showed crude inventories rose by two million barrels last week, while stockpiles of refined product also climbed across the board.
Those figures are likely to come under greater scrutiny soon as fighting between the US and Iran drives demand for US crude exports to compensate for renewed disruptions to Middle Eastern flows. BLOOMBERG
