Escalating Middle East conflict pushes oil prices to 6-week high

Oil prices surged on Thursday, July 23, 2026, extending their rally for a fifth straight session as renewed military tensions in the Middle East heightened concerns over global crude supplies.

Brent crude futures climbed $2.42, or 2.6 per cent, to $96.49 per barrel by 0640 GMT, reaching their highest level in six weeks.

U.S. West Texas Intermediate (WTI) crude gained $1.59, or 1.8 per cent, to $88.42 a barrel after posting a 3 per cent increase in the previous session.

The market was driven by mounting fears of supply disruptions after Iran claimed it had shut the Strait of Hormuz, a key shipping route through which a significant share of the world’s oil exports passes.

Iran’s Revolutionary Guards said an oil tanker caught fire following an explosion near the Strait of Hormuz as it attempted to navigate what they described as a mined route. Two other tankers reportedly turned back amid the heightened security risks.

The Guards also warned that no vessel would be allowed to transit the strait without Iran’s approval while U.S. military operations in the region continued, according to Reuters.

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Iran-backed Houthi fighters in Yemen intensified attacks on ships transporting Saudi oil through the Bab el-Mandeb Strait, raising the prospect of disruptions at another critical global energy chokepoint.

The dual threats to the Strait of Hormuz and the Bab el-Mandeb have intensified concerns about the security of global oil supplies, prompting traders to price in a higher geopolitical risk premium.

A senior market analyst at Phillip Nova, Priyanka Sachdeva, said the market is facing an unusual situation where two vital oil shipping routes are under simultaneous pressure.

She noted that while geopolitical tensions have lifted prices, a stronger and more sustained rally would depend on evidence of prolonged shipping disruptions or significant losses in oil supply.