Martha Dowding
Research Associate, Flux
Brent Drops to $106.52/bbl
Brent falls to $106.5 as Hormuz permit fears, Iran uranium tensions and tighter supply risks shake markets.
This afternoon, Jul’26 Brent futures reached a high of $109.26/bbl at 14:40 BST and dropped to $106.52/bbl at 17:02 BST (time of writing).
There were reports that Iran’s Supreme Leader, Mojtaba Khamenei, ordered enriched uranium to remain inside Iran. The move complicates ongoing US-Iran peace talks, as Washington has pushed for Iran’s highly enriched uranium stockpile to be shipped abroad as part of any agreement. Iran later denied that a new directive had been issued, calling the reports “enemy propaganda,” while saying uranium downblending would continue domestically. Market concerns also intensified after Iran’s new Strait authority announced transit permits would now be required in the Strait of Hormuz, raising fears over disruption to a route carrying around one-fifth of global oil and gas flows. However, the US Secretary of State Marco Rubio said a deal between Washington and Tehran would be unfeasible if Iran moves forward with a tolling system in the Strait of Hormuz. The IEA warned the oil market could enter a “red zone” later this summer due to tighter Middle East exports, falling inventories, and peak seasonal demand, with further strategic reserve releases possible if needed. Saudi oil export revenues rose 37.4% in March to a 3.5-year high despite record-low volumes, driven by prices above $100 and rerouted flows via the Red Sea. Oil made up over 80% of exports, with Aramco’s pipeline running at full 7 mb/d capacity to offset Hormuz disruption risk. China raised fuel price caps again amid persistently high crude prices. Chinese gasoline demand is expected to drop sharply this year due to cost pressure and EV adoption. Finally, at the time of writing, the front-month (Jul/Aug) and 6-month (Jul/Jan) Brent futures spreads are at $3.55/bbl and $18.41/bbl, respectively.
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