Crude oil prices extended their rally on Wednesday amid escalating tensions in the Middle East, with Brent crude nearing $90 a barrel and West Texas Intermediate climbing above $84. The surge comes as attacks on commercial vessels near the Bab el-Mandeb Strait and continued restrictions in the Strait of Hormuz raise fears of prolonged supply disruptions.
UK energy stocks such as BP and Shell led gains on the FTSE 100, with BP shares up 18.5% from their July low and Shell recovering 16% from its year-to-date low. Both companies recently reported strong quarterly profits, benefiting from higher energy prices. BP’s underlying replacement cost profit jumped to $5.7 billion in Q2, while Shell posted adjusted earnings of $9.8 billion.
The situation in the Strait of Hormuz—a critical chokepoint for global oil shipments—remains dire, with US EIA estimates showing throughput down from 21.6 million barrels per day in late 2025 to just 4.9 million in Q2 2026. The agency now expects 5.5 million barrels a day of Middle East production to remain shut in through August, contributing to a forecast inventory draw of 3.8 million barrels per day in Q3.
Geopolitical brinkmanship between the US and Iran shows no signs of easing, with both sides issuing demands and Trump signaling a focus on economic pressure. Meanwhile, Houthi attacks have added risk to alternative shipping corridors, further constraining supply.
For the crypto market, higher oil prices could reignite inflation concerns and influence central bank policy, potentially affecting risk appetite. However, the immediate impact remains indirect, with traders watching US CPI data for any signal of broader economic pressure.
