West Texas Intermediate crude oil for August rose today, extending Monday’s gains, while August gasoline futures also climbed. U.S. re-escalation around the Strait of Hormuz and additional attacks on shipping supported prices, pushing crude to a one-month high and gasoline to a 1.5-month peak before parts of the rally faded.
Crude prices initially strengthened after President Trump reimposed a blockade on Iranian ships transiting the Strait of Hormuz and U.S. forces conducted another round of strikes against Iran. The market then trimmed gains after Trump said a proposed 20% Hormuz cargo fee would be replaced by trade and investment deals with Gulf states—easing some of the immediate expectations of tighter oil flows.
Key takeaways
- Price move: August WTI crude rose +0.81 (+1.04%), while August RBOB gasoline added +0.0466 (+1.47%).
- Catalyst: Escalating actions tied to the Strait of Hormuz and renewed concerns about shipping disruptions initially lifted crude and refined products.
- Supply cross-currents: Support came from geopolitical risks and damage to Russian refining capacity, but price pressure emerged as data pointed to higher Russian crude exports and stronger Middle East production.
- Investor implication: The market is balancing near-term disruption risk against evidence of rebuilding supply—keeping volatility elevated.
What drove the move
Geopolitical risk dominated early trading. According to the article, Trump reimposed a blockade on Iranian ships moving through the Strait of Hormuz, and U.S. forces launched additional strikes against Iran. The UAE also said two oil tankers were attacked in Omani waters while transiting the southern route of the strait, increasing fears of further disruption to global shipping through one of the world’s most important chokepoints.
Crude prices later gave up most of their advance after Trump said he would replace the 20% U.S. reimbursement fee for protecting the Strait of Hormuz with trade and investment deals with Gulf states. The shift signaled a potential change in how the U.S. intends to manage costs tied to the security arrangement, which traders appeared to interpret as reducing the likelihood of sustained, fee-driven tightening in market conditions.
Support also came from Russia-related supply constraints. The report cited OPEC monthly data showing Russian crude production at 8.928 million barrels per day in June, the lowest in 2.5 years. It also referenced EA Analytics, which said Russian crude-processing rates averaged 3.91 million bpd in the first 10 days of July, the weakest in 21 years, attributed to damage to Russian energy infrastructure from drone and missile attacks linked to the Ukraine war.
Those disruptions have had knock-on effects for refined products. Bloomberg was cited in the article saying Ukrainian forces have attacked Russian fuel-producing facilities more than 50 times this year, hitting at least 24 of Russia’s 34 largest refineries. The article further noted that, as of late June, about 90% of Russian regions had imposed fuel rationing or reported supply issues, and that Russia banned almost all gasoline, jet fuel and diesel exports—tightening supplies and worsening a gasoline shortage.
Market reaction: support wins briefly, bearish supply data follows
While the risk premium from shipping and refinery damage pushed crude and gasoline higher earlier, the article pointed to multiple supply indicators that are typically bearish for prices.
One such factor was evidence of stronger Russian crude exports. Bloomberg data cited in the article showed the four-week average of Russian crude exports rose to 4.13 million bpd through June 28, the highest since Russia invaded Ukraine in 2022. The report attributed the improvement to the possibility that Russia is increasing crude shipments as refining capacity falls due to infrastructure damage.
Broader production signals also weighed on sentiment. The article referenced a monthly International Energy Agency report published last Friday, stating the UAE boosted crude oil production to an all-time high of 4.1 million bpd in June. It also cited the IEA’s warning from June 17 that the impact of the Iran war on global oil demand would be deeper than previously anticipated, with world oil consumption expected to decline by 1.1 million bpd this year (larger than an earlier estimate of 420,000 bpd).
On the U.S. side, the outlook for higher output was described as another negative for crude. The report said the Department of Energy raised its 2026 U.S. crude production estimate to 13.78 million bpd from a June estimate of 13.72 million bpd.
OPEC, inventories and rig data in focus
Beyond immediate geopolitical drivers, the article also highlighted supply management and demand balance signals. It cited comments from OPEC delegates on May 14 indicating the cartel aims to continue a sequence of quota increases over the coming months, working toward completing the return of halted production by the end of September. The report also referenced OPEC+ agreeing to restore about two-thirds of a 1.65 million bpd supply cut made in 2023, with further increases planned in monthly stages.
More recently, the article noted that OPEC+ said on Sunday it would boost crude output by 188,000 bpd in August—although it added that the increase may be difficult to fully deliver as Middle East producers restart output curtailed by regional conflict.
For near-term market positioning, the report included logistics and stock signals. It cited Vortexa, saying crude oil stored on tankers stationary for at least seven days fell 32% week-over-week to 82.85 million barrels in the week ended July 10.
It also pointed to recent U.S. inventory and production updates. According to EIA data cited in the article for the week ended July 3, U.S. crude inventories were 6.6% below the seasonal five-year average, gasoline inventories were 6.9% below the seasonal average, and distillate inventories were 13.4% below the seasonal average. The article also said U.S. crude production rose 0.4% week-over-week to 13.860 million bpd, just below a record high of 13.862 million bpd set in the week of November 7.
In drilling activity, Baker Hughes data cited in the article showed the number of active U.S. oil rigs in the week ended July 10 held at a 13-month high of 445 rigs, up from a 4.25-year low of 406 rigs posted in December 2025. However, it noted the rig count remains far below the 5.5-year high of 627 reported in December 2022.
What to watch next
Traders will likely keep watching developments tied to Hormuz and the pace of disruptions to shipping, especially given the apparent shift in U.S. policy messaging around the Hormuz fee. Attention will also remain on OPEC+ follow-through on production increases, updates on Russian refinery damage and export flows, and the next round of U.S. inventory and macro data that could influence demand expectations.
