Oil Prices Breach $100 Amid US-Iran Conflict and Houthi Attacks

Brent crude oil prices surged over 30% in July 2026, breaching $100 per barrel due to a combination of military escalation in the Middle East and maritime disruptions. The spike followed 12 consecutive nights of U.S. military strikes against aircraft hangars and drone storage facilities in Iran. Donald Trump warned that Washington would hold Iran responsible for Houthi attacks on shipping, which included missile and drone strikes on two Saudi tankers, the Encelia and Layla, in the Red Sea. These attacks occurred alongside an Iranian blockade of the Strait of Hormuz, which severely reduced oil volumes flowing through the chokepoint.

The energy crisis extended beyond crude oil, as refined product markets tightened. Ukrainian drone strikes on Russian refineries and the port of Novorossiysk forced Kazakhstan to suspend most of its oil exports and prompted Russia to consider extending a diesel export ban. This has pushed effective diesel prices above $180 a barrel, while shipping and insurance costs have risen sharply.

Global economic impact has been widespread. India reported equity market volatility, while Nigeria and Taiwan implemented domestic fuel price hikes. To cushion the shock, the International Energy Agency released 400 million barrels of emergency stocks, though officials cautioned that commercial inventories remain low. Prices eased slightly to approximately $96 per barrel on July 26 after the United States paused its bombing campaign against Iran.