Brent crude surged roughly 7% on Thursday to close back above $100 per barrel for the first time since May 26, with WTI up 6% to $92.19, after a week in which the fragile summer détente in the Gulf collapsed into renewed fighting. A reopening deal that Washington, Muscat and regional mediators believed was essentially done in early July unraveled when Iran resumed attacks on shipping — and the market has spent the two weeks since repricing the Strait of Hormuz risk premium it had spent June unwinding. For the current front-month level, see the live Brent chart, which updates in real time.
How the Détente Died
The reversal is stark measured against where the month began. On July 1, with President Trump saying talks were progressing favorably, Brent traded as low as $71.57 — a level consistent with the near-normal transit flows we documented in our June 24 coverage. The first crack came on July 8, when Trump threatened renewed bombing and an expanded blockade after negotiations stalled, sending Brent up more than 5% to $78.02 in a single session.
Then the conflict came back off the table and onto the water. Mediators thought they had a reopening agreement roughly three weeks ago, only to watch Tehran resume attacks on commercial vessels. On July 17, Kuwait reported that Iran had struck its water infrastructure — an escalation beyond shipping and energy targets — and Brent finished that session at $88.10. The two weeks since have brought sustained exchanges that officials on both sides describe as the closest the crisis has come to all-out war since April.
$100 Means Something Different This Time
This is Brent's third visit to triple digits this year, but the mechanics differ from March and April. Then, the premium was built on an outright closure and a stranded tanker backlog. Now the market is pricing something arguably harder to hedge: a demonstrated pattern in which every negotiated arrangement — the April ceasefire, the May convoy understanding, the July draft deal — has broken down within weeks. Traders are no longer pricing a discrete event but a regime of recurring disruption, and that shows up as a fatter, stickier premium across the whole curve rather than a spike concentrated at the front.
Supply Backdrop: Thinner Cushion Than the Spring
The market is also meeting this escalation with less slack than it had in March. Strategic reserves were drawn heavily during the spring closure, OECD commercial inventories never rebuilt through the brief June normalization, and OPEC+ — which approved another 188,000 bpd increase for August at its July 5 meeting — is adding paper barrels faster than its members can physically ship them through a contested strait. Gulf producers continue to lift below quota for the same logistical reasons that have constrained them all year; see our OPEC production tracker for the widening gap between quota and output.
Term Structure and Volatility
Front-end backwardation has re-steepened sharply as prompt barrels regain their scarcity premium, reversing the June flattening. Options markets tell the same story: implied volatility on nearby Brent contracts has jumped back toward crisis levels, with call skew reflecting demand for protection against a full re-closure. For a refresher on reading the curve, see contango and backwardation explained.
What to Watch
The escalation path is now the market's central question. Washington has threatened a major bombing campaign if attacks continue; Tehran has shown it can reach targets — including civilian infrastructure — across the Gulf. Watch three things: whether commercial transits through Hormuz, which have again collapsed, resume in any form; whether the diplomatic channel through Oman and Pakistan survives the fighting; and whether the early-August OPEC+ meeting responds to triple-digit prices or continues to treat the strait, not quotas, as the binding constraint. A durable pause in attacks would likely unwind this move as quickly as it built; a U.S. strike campaign would put the April high above $118 — and the $125 escalation target flagged earlier in the crisis — back in play.
The whipsaw from $71 to $100 in three weeks is a reminder that in this market, the price of oil is functionally a probability-weighted bet on a single waterway. The live chart remains the fastest read on how that bet is shifting.