Brent Crude Recovers to $90 as Hormuz Supply Route Stays Unresolved After Iran Pause
A $51 billion weekly surge in energy market open interest and falling U.S. inventories pulled ICE Brent crude back toward $90, even as Iran diplomacy provides no guarantee of restored Hormuz flows.
Energy open interest swelled $51 billion, or 6%, week on week to $873 billion by late Tuesday (2026-07-28), J.P. Morgan's commodities research team reported to Rigzone, as ICE Brent crude front-month staged a recovery from Monday's (2026-07-27) sharp selloff. Naeem Aslam, CIO at Zaye Capital Markets, put Brent near $87.81 per barrel on Wednesday (2026-07-29), up approximately 4.4%, with U.S. crude inventories falling 3.3 million barrels in the week ending July 24 (2026-07-24) providing what he called "additional physical support."7
The scale of that recovery makes sense only against what preceded it. ICE Brent front-month climbed to $100 during the week of July 20 (2026-07-20) after Iran-aligned Houthis attacked Saudi Arabian oil tankers in the Red Sea. A U.S. decision to pause military strikes on Iran triggered a 9% drop on Monday (2026-07-27) to below $88 per barrel. President Trump's comments later that day about "good talks" with Tehran then kept a lid on any full intraday recovery, pushing Brent down roughly 8% from its bounce.6
By Wednesday afternoon (2026-07-29), ICE Brent crude front-month was trading at $90.15 per barrel. Still roughly $10 below the peak set at the height of Hormuz disruption fears, that price reflects a market that has taken diplomatic signals at face value without confirmed restoration of tanker flows at scale.7,5
The supply stakes at the strait are substantial. The U.S. Energy Information Administration put the daily flow of crude oil and petroleum products through the Strait of Hormuz at approximately 20 million barrels in 2024, representing about 20% of global petroleum liquids consumption. When the strait effectively closed on March 4 (2026-03-04), ICE Brent front-month surged more than 55% from pre-war levels near $72 per barrel to highs between $119 and $120.5,4
Deutsche Bank analysts led by Jim Reid noted that the 10% increase in Brent prices during the prior week had "added to fears that the global economy was facing a prolonged inflation shock, and that the Fed might need to hike rates more aggressively in response." Analysts more broadly expect the conflict to add roughly 0.8% to global inflation.6,4
That macro channel ran directly through Wednesday's (2026-07-29) Federal Reserve decision. Aslam flagged the FOMC statement, rate announcement and press conference as a near-term driver of oil through the U.S. dollar, financing conditions and demand expectations. A hawkish outcome could push the dollar higher and crimp dollar-denominated crude prices even if Middle East supply concerns persist.7
Goldman Sachs had raised its fourth-quarter oil price forecasts in late May (2026-05-20) to $90 per barrel for Brent and $83 for WTI, citing reduced Middle East output. ICE Brent front-month has already reached that target level in July, though the supply-route uncertainty that underlies it remains unsettled.1
Some reassurance has come from evidence that vessels are once again transiting the Strait of Hormuz with their satellite tracking systems active. Ipek Ozkardeskaya, senior analyst at Swissquote, said that development had helped drive prices lower as traders gained more confidence about energy shipment security, according to The Independent's June 25 (2026-06-25) reporting. But ANZ analysts cautioned that "shipping operators are adopting a cautious approach and inbound movements have slowed under heightening security concerns."2,3
A pause in military strikes has not reopened the supply corridor. As The Guardian reported Monday (2026-07-27), the situation carries no guarantees that oil will soon flow freely from the area. Brent has priced in diplomatic progress faster than tanker data has confirmed it, and the $51 billion in fresh open interest counted by J.P. Morgan through Tuesday (2026-07-28) will face a direct test if Hormuz transit figures or the Fed's tone turns.6,7