Brent Crude Holds Near $100 as Red Sea Supply Risks Escalate

Key Takeaways

• Brent crude traded near $100 a barrel on July 24, while WTI remained above $91 after the previous session’s sharp rally.
• Oil prices are heading for strong weekly gains as attacks on Saudi tankers raise concerns about Red Sea supply routes.
• Restricted traffic through the Strait of Hormuz and disrupted exports from Kazakhstan have added to global supply uncertainty.

Oil Markets Pause After a Sharp Weekly Rally

Oil prices edged lower on Friday, July 24, but remained close to multi-week highs as escalating Middle East tensions continued to support the market.

At the latest check, Brent crude futures were trading at approximately $100.02 per barrel, down around 0.7% from the previous close. US West Texas Intermediate crude was near $91.39 per barrel, falling approximately 0.9%.

Brent traded within a daily range of $99.59 to $101.16, while WTI moved between $91.17 and $92.81. The modest pullback followed a dramatic rally on Thursday, when Brent gained approximately 7% and closed above $100 for the first time since May.

Despite Friday’s retreat, Brent was on course to rise about 14.6% for the week, marking its fourth consecutive weekly advance. WTI was heading for an increase of approximately 11.8%.

The latest price action suggests that some traders are taking profits following Thursday’s surge. However, geopolitical risks remain elevated enough to keep both benchmarks well above their levels from the beginning of July.

Red Sea Tanker Attacks Threaten Saudi Oil Exports

The latest increase in oil prices followed reported attacks on two Saudi oil tankers in the Red Sea.

The Iran-aligned Houthi movement said it had targeted the vessels after announcing a naval blockade against Saudi Arabia. One tanker was reportedly set on fire, intensifying concerns about the security of crude shipments travelling through the region.

The Bab el-Mandeb Strait connects the Red Sea with the Indian Ocean and has become increasingly important for Saudi exports. Saudi Arabia has been redirecting crude through its east-west pipeline to the Yanbu terminal on the Red Sea coast, allowing shipments to bypass the Strait of Hormuz.

Approximately 2.5 million barrels per day of Saudi crude from Yanbu have recently been moving through Bab el-Mandeb. Any sustained disruption could force tankers to travel around the Cape of Good Hope, significantly increasing journey times, insurance costs and freight rates.

The threat to this route is particularly important because it creates a second major supply risk at a time when traffic through the Strait of Hormuz is already severely restricted.

Strait of Hormuz Traffic Falls to a Trickle

The Strait of Hormuz normally serves as one of the world’s most important energy corridors. However, tanker traffic through the waterway has fallen sharply amid the renewed US-Iran conflict.

Ship-tracking data indicated that only one tanker crossed the strait on Thursday, the lowest number since May 7. Saudi Arabia and other Gulf producers have attempted to use alternative pipelines and export terminals, but these routes cannot fully replace Hormuz capacity.

The combination of restricted Hormuz traffic and growing security threats around Bab el-Mandeb means that both the eastern and western export routes for Gulf oil are facing pressure.

This does not necessarily mean that all affected production has been removed from the market. Nevertheless, delays, rerouting costs and uncertainty about future shipments have increased the geopolitical risk premium included in oil prices.

The situation is especially relevant to traders and businesses in the UAE and wider Middle East. Higher crude prices may support regional energy revenues, but expensive shipping, insurance and refined fuels could also raise transport and operating costs.

Kazakhstan Disruption Adds to Supply Concerns

Oil markets are also monitoring reduced production in Kazakhstan following suspected Ukrainian drone attacks near the country’s main Black Sea export terminal.

The Caspian Pipeline Consortium suspended loadings and stopped receiving additional crude after tanker operations at the terminal were disrupted. The route normally handles approximately 2% of global daily crude supply.

Kazakhstan’s energy ministry confirmed that producers had temporarily reduced output. Although it did not provide a total figure, the country’s largest oilfield was reported to have cut production by more than half.

This disruption would ordinarily have a limited influence on global prices. Its impact is potentially greater now because it has emerged alongside supply concerns in the Gulf and Red Sea.

What Could Move Oil Prices Next?

The immediate focus is whether Brent can remain above the psychologically important $100 level. Friday’s intraday low near $99.59 shows that the market is already testing this area.

Further attacks on tankers, a sustained blockade around Bab el-Mandeb or another decline in Hormuz traffic could renew upward pressure. Confirmation that Saudi exports are being delayed would also strengthen concerns about physical supply.

Conversely, evidence of diplomatic progress or the restoration of safer shipping routes could reduce the geopolitical premium quickly. Oil prices have already experienced sharp reversals during previous ceasefire negotiations, demonstrating how sensitive the market remains to political headlines.

Traders will also watch refinery activity. Expensive crude has encouraged some refiners to reduce processing rates, tightening supplies of diesel, petrol and jet fuel. Refined-product shortages could increase inflationary pressure even if crude prices stabilise.

For July 24, the overall oil-market picture remains volatile. Brent has pulled back slightly from its intraday high but is still trading close to $100, while WTI continues to hold above $91. Supply-route developments in the Strait of Hormuz and Bab el-Mandeb are likely to remain the main drivers of short-term price movements.