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The dual disruption of Hormuz and Bab el-Mandeb is tightening global oil flows, raising transport costs and fueling expectations of $100 oil.
Friday, July 24, 2026
The double blockade of the Strait of Hormuz and the Bab el-Mandeb has turbo-boosted oil prices this week, with both ICE Brent and WTI gaining $10 per barrel on the week. Whilst technically the Bab el-Mandeb could be bypassed through the Suez Canal, resulting in longer routes and higher costs, the dramatic decline in transits via the Hormuz should be of particular worry to the oil markets. President Trump’s usual Friday posts notwithstanding, oil-deprived refiners across the globe will soon push oil back above $100 per barrel.
OPEC+ Seeks to Fully Unwind Voluntary Cuts. OPEC+ is expected to raise September output targets by another 188,000 b/d at its August 2 meeting, signalling the group's push to fully unwind its 2023 voluntary cuts totalling 1.65 million b/d despite the US-Iran conflict and Red Sea security threats.
Houthis Open 2nd Front Against Saudi Oil Flows. Yemen's Houthis claimed missile attacks on two Saudi ships in the Red Sea, damaging both the Encelia and Layla tankers, escalating threats to Saudi Aramco's crude exports as disruptions force shipowners to circumnavigate Africa to avoid Houthis.
Chinese Tankers Blast Through Red Sea Threat Zone. Two China-owned tankers carrying Saudi crude, Xin Long Yang and Cosnew Lake, passed through the Bab el-Mandeb despite recent Houthi attacks, highlighting Beijing's readiness to cut a deal with the Houthis amidst mounting risks across the Red Sea.
Copper Rides Chinese Tightness Higher. Copper prices climbed to a one-month high of $13,835 per tonne amidst shrinking inventories and robust demand in China, while waning hopes for a renewed Iran ceasefire and the re-imposition of U.S. tariffs provided additional support to industrial metals.
Spain and Algeria Deepen Gas Partnership. Spain and Algeria have reached a deal to hike natural gas supplies, eyeing a flow boost through the Medgaz pipeline to 12 bcm/year and expanding LNG deliveries as Madrid seeks to reinforce energy security amid US trade threats and soaring LNG prices.
Trump Revives Broad Tariffs Under Forced Labor Banner. The Trump administration will impose new tariffs of 10-12.5% on imports from 60 trading partners, including the EU, citing weak enforcement of forced labor bans, replacing the outlawed global tariff regime and exempting oil, gas and fertilizers.
Panama Explores State Role in Copper Mine Revival. Panama is considering the creation of a state-owned mining company to help reopen the shuttered Cobre Panama copper mine, equivalent to 1.5% of global copper output, potentially giving previous owner First Quantum (TSE:FM) an operating stake.
EU Agrees 21st Russia Sanctions Package. EU members have reached a political agreement on the bloc's 21st sanctions package against Russia, including a 12-month extension of the Russian oil price cap and a watered-down renewable exemption allowing Russian LNG transshipments to third countries.
Glencore Signals Lead Stocks Drawdown. Trading giant Glencore (LON:GLEN) is reportedly preparing to withdraw around 30,000 metric tons of lead from LME warehouses after stocks swelled to record highs, potentially halting declines in lead prices as the three-month contract jumped to $1,900 per tonne.
US and Saudi Arabia Seal Nuclear Cooperation Pact. The US and Saudi Arabia have signed a civilian nuclear cooperation agreement, paving the way for US firms to participate in the kingdom's nuclear energy program as Riyadh seeks to diversify its power mix and reduce crude use in power generation.
Qatar Extends LNG Force Majeure as Hormuz Closure Drags On. QatarEnergy has extended force majeure declarations on LNG deliveries to Asian buyers and will continue leasing out LNG carriers through October, stoking fears that its LNG export disruptions will persist beyond Q3 2026.
Rhine Runs Dry as Europe's Supply Artery Chokes. Water levels on the Rhine are forecast to fall to record lows in early August, potentially as low as 30cm, threatening to halt barge navigation and disrupt fuel and chemical deliveries across Central Europe as traders scramble for alternative logistics options.
US Tightens the Screws on Cuba's Energy Sector. The United States has imposed fresh sanctions on three Cuban energy-related entities, including the petroleum research arm of state oil company CUPET and two gas importing firms, further increasing sanctions pressure on the island's fuel supply chain.
TotalEnergies Nears Exit from Arctic LNG 2. French oil major TotalEnergies (NYSE:TTE) will transfer its 10% stake in Russia's sanctioned Arctic LNG 2 project to a Novatek subsidiary in the near term, marking a further retreat from the sanctions-constrained project despite continued LNG shipments to Asia.
Pakistan Lets the Market Set Fuel Prices. Pakistan has shifted to daily fuel price adjustments based on international benchmarks and currency movements, seeking to align domestic fuel costs more closely with global oil market dynamics after spending almost $0.5 billion on fuel subsidies in 2026 to date.
By Tom Kool for Oilprice.com
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