Crude oil prices surged by 11% following Israel’s military strikes on Iran, which included attacks on approximately 100 targets related to Iran’s nuclear and ballistic missile programs. As of now, July WTI crude oil is up 4.20 (+6.17%), while RBOB gasoline is down by 0.0825 (-3.85%). About 20% of the world’s oil consumption travels through the Strait of Hormuz, raising concerns about potential disruptions.
The Trump administration has stated that the US is “not involved” in the military strikes, but there are concerns that US assets could be threatened if Iran retaliates. Meanwhile, OPEC+ plans to increase crude production by 411,000 barrels per day (bpd) in August to capitalize on summer demand, which could further impact oil prices. Current US crude oil production stands at 13.428 million bpd, with inventories down 8.3% below the seasonal 5-year average.
In other developments, active US oil rigs dropped to a 3-1/2 year low of 442, down from a high of 627 rigs in December 2022. Concerns over a global oil glut persist, as OPEC+ gradually restores production cuts that have been in place for two years.
