Brent crude is trading between $76 and $77, and WTI between $71 and $72. Despite daily declines of 0.3%, the market has accumulated weekly gains due to the resurgence of clashes in the Strait of Hormuz.
The Brent crude, a benchmark in Europe, is moving this week between $76.11 and $76.76 per barrel, while West Texas Intermediate (WTI) is in the range of $71.87 to $72.49. Although daily drops are around 0.3%, the weekly balance points to gains thanks to the escalation of military clashes between the United States and Iran.
The Strait of Hormuz Back in Focus
The clashes have once again hindered maritime traffic in the Strait of Hormuz, through which normally a fifth of the world's crude oil passes. This revives fears of physical supply disruptions, according to market sources reported by the PL agency.
The trigger for the current turmoil was US President Donald Trump's statement that the peace memorandum with Tehran had collapsed and the warning that Washington was ready to resume military action. The news triggered massive sell-offs in European stock markets: the Ibex 35 dropped by 2.7% on that day and was close to losing the 19,000 points mark, particularly hit by the banking sector.
Global Oversupply Limits Gains
Despite the uptick, gains are constrained by projections from the International Energy Agency (IEA), which maintains its forecast of a significant global crude surplus in the coming months. This dampening effect prevents Brent from clearly surpassing the $80 barrier for now.
However, analysts at Barclays warn that Brent could test $100 per barrel if the risk premium linked to hostilities remains active. That level would exert additional inflationary pressure on the eurozone, at a time when the European Central Bank is already dealing with high rates and reduced appetite for risk assets.
Inflation and Interest Rates: Another Open Front
The rise in crude revives fears of persistent inflation in Europe. Minutes from the US Federal Reserve underline high inflation risks due to "strong demand related to artificial intelligence, the conflict in the Middle East, and the effects of tariffs," reinforcing the scenario of high rates and pressuring European fixed income.
Waleed Said, an analyst at GivTrade, told The Wall Street Journal that "oil is likely to remain supported if the risk premium linked to the war against Iran stays active." Meanwhile, an analysis from XTB noted that European indices were trading lower as the rise in oil and geopolitical tensions fueled concerns about inflation and central bank policy outlooks.
What to Expect in the Coming Days?
The key for the coming days lies in the diplomatic evolution between Washington and Tehran, which remains fragmented according to reports from Friday, July 10. Markets are also awaiting the full release of the minutes from the Federal Reserve's first meeting to gauge whether it will tighten its stance in response to the inflationary surge caused by oil.
For investors, volatility is the dominant theme: Brent already hit a peak close to $125 per barrel at the end of April, two months after the start of the US and Israel's military campaign against Iran. Now, with prices around $76, any diplomatic announcement or new attack can significantly move the market.
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