Brent Climbs as Hormuz Closure and Houthi Embargo Drain 316 Million-Barrel US Reserve
Updated
Updated · Foreign Policy · Jul 21
Brent Climbs as Hormuz Closure and Houthi Embargo Drain 316 Million-Barrel US Reserve
3 articles · Updated · Foreign Policy · Jul 21
Summary
Brent crude is rising again as US-Iran fighting resumes, the Strait of Hormuz recloses and the Houthis impose a maritime embargo on Saudi shipping, leaving the oil market more exposed than in the war’s first phase.
316 million barrels remained in the US Strategic Petroleum Reserve by mid-July—the lowest since 1983—while J.P. Morgan estimated only about 800 million barrels of global stored oil were readily usable and a third was already gone by late April.
Saudi rerouting capacity is near its limit, and a disrupted Bab el-Mandeb route would force tankers around Africa or through the Mediterranean, more than doubling voyage lengths and tightening shipping and insurance capacity.
Finished fuels look even tighter than crude: crack spreads have hit a four-year high, Gulf refineries remain partly offline, Russian diesel exports are banned, and product inventories had little time to rebuild during the June cease-fire.
China cut June crude imports 41% from a year earlier, briefly easing pressure, but the report says that window is closing as stockpiles stay depleted and traders may panic-buy if they no longer expect Trump to back down.
Can the UK's new leader deliver on spending promises without triggering another bond market crisis?
With the U.S. economy growing while others contract, is the world heading for a major economic decoupling?
How will the global economy function if the Strait of Hormuz becomes a permanent conflict zone?
Brent Oil Surges 19% Amid Iran War; UK Gilt Yields Top 5% as Political and Energy Crises Roil Global Markets
Overview
In July 2026, Brent crude oil prices surged 19 percent, reversing earlier declines after the US-Israel war on Iran began in late February. Although a peace memorandum was signed in June, escalating geopolitical tensions around the Strait of Hormuz and both Iran and the United States holding firm to their positions have driven renewed volatility in oil markets. This has created a pricing environment marked by daily swings, as markets struggle to balance risks of supply disruption, diplomatic uncertainty, and the search for alternative supplies. These developments highlight the deep interconnectedness of geopolitical events and global energy prices.