Crude oil markets surged on Thursday, July 11, as escalating geopolitical tensions in the Middle East and the White House’s delayed tariff decisions pushed oil prices sharply higher. At 11:00 AM, Brent Crude climbed 2.52% to $70.37, WTI Crude rose 2.85% to $68.47, and Murban Crude added 1.91% to close at $71.49 per barrel. Natural gas, in contrast, slipped slightly by 0.09% to $3.334 per MMBtu, reflecting regional cooling in short-term demand.
Middle East Tensions Fuel Market Fears
The primary driver behind the rally was rising concern over potential supply disruptions in the Middle East. Tensions soared after Iran’s retaliatory missile strike on a U.S. air base in Qatar a response to U.S.-Israeli airstrikes in June targeting Iran’s nuclear facilities. With the Strait of Hormuz handling over 25% of global oil shipments, traders priced in a significant risk premium.
The situation worsened after Houthi rebels struck and sank two Greek-owned bulk carriers in the Red Sea, doubling war risk insurance premiums for ships passing through the region to 0.7% of vessel value. These geopolitical flashpoints directly lifted Brent and Murban prices, which are especially sensitive to Middle East unrest.
Delayed Tariffs Bolster Market Optimism
Adding momentum to the bullish trend, U.S. President Donald Trump postponed a highly anticipated tariff announcement, including a proposed 50% duty on Brazilian commodities. The delay soothed fears of an imminent trade war and revived optimism for global fuel demand.
Trump’s hint at a “major announcement” regarding Russia next Monday also stirred speculation about fresh sanctions on one of the world’s largest oil exporters, further tightening the market’s outlook. Additionally, a weaker U.S. dollar made crude cheaper for foreign buyers, fuelling extra demand and driving up prices across all major benchmarks.
OPEC+ Strategy Stirs Mixed Reactions
Meanwhile, OPEC+ confirmed a 548,000 barrels-per-day (bpd) production increase for August, following a 411,000 bpd hike in June. Though intended to meet rising summer demand, the move raised doubts about Saudi Arabia’s capacity to scale production meaningfully.
The Kingdom’s recent hike in official selling prices signals confidence, yet analysts remain sceptical. With ageing fields and limited spare capacity, Saudi Arabia may struggle to meet its targets. Bank of America estimates Saudi Arabia needs Brent at $96.20 per barrel to balance its budget well above current levels.
Murban Crude Rides on Asian Demand
Murban Crude’s 1.91% increase was backed by robust buying interest from Asia. China ordered 51 million barrels of August-loading Saudi crude, the highest monthly volume since April 2023, highlighting strong import appetite.
The UAE’s plan to scale Murban production to 2.1 million bpd in July, and ultimately 6 million bpd by 2027, has strengthened the grade’s market presence. Nonetheless, buyers are wary of contamination concerns in U.S. Mars crude and prefer Murban for its light-sweet profile and Middle East accessibility.
Natural Gas Slips on Balanced Fundamentals
In contrast, natural gas prices edged down by 0.09%, with the mild drop attributed to short-term regional shifts in demand. Nonetheless, high summer temperatures in North America and Asia have increased cooling demand, keeping broader market fundamentals tight. Posts on X (formerly Twitter) note that natural gas prices remain 40% higher year-on-year, due to surging utility costs and constrained inventories.
Outlook: Volatility Likely to Persist
Despite this rally, market watchers warn that rising inventories and weaker demand forecasts could eventually apply downward pressure. The International Energy Agency (IEA) projects 2025 global oil demand to grow by just 700,000 bpd the slowest pace since 2009 while supply is expected to expand by over 2.1 million bpd, led by non-OPEC+ producers.
U.S. crude stocks rose by 7.1 million barrels in the week ending July 4, underscoring potential oversupply risks. If Trump reinstates tariff threats or the Iran-Israel conflict escalates, oil could spike further. Otherwise, Brent may retreat toward its 2025 average forecast range of $66–$69, falling to $58–$66 in 2026 if inventories build and demand softens.
Summary at a Glance
| Benchmark | Price | Change |
|---|---|---|
| Brent Crude | $70.37 | +2.52% |
| WTI Crude | $68.47 | +2.85% |
| Murban Crude | $71.49 | +1.91% |
| Natural Gas | $3.334/MMBtu | −0.09% |
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