Oil prices jumped on Wednesday, July 22, with escalating geopolitical tensions and mounting risks to key maritime chokepoints driving the rally.

International Brent crude rose nearly 5% to above $95/bbl, its highest level in almost 6 weeks, while US crude climbed more than 4% to above $88/bbl. The gains extend a strong upward trend, with prices up about 30% since the start of the month and more than 55% year to date, reversing declines seen after a mid-June memorandum of understanding (MOU) between the US and Iran.

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The earlier agreement, aimed at de-escalating conflict and reopening the Strait of Hormuz, was declared “over” on July 8 by President Donald Trump. Since then, hostilities have intensified, with US forces carrying out an 11th consecutive night of strikes on Iran. Comments from US Secretary of State Marco Rubio further dampened expectations for near-term diplomacy, noting that while Washington remains open to talks, Iran does not appear to be engaging seriously.

At the same time, security risks to global shipping have increased. The UK Maritime Trade Operations (UKMTO)  has reported multiple recent attacks on vessels in the region, including incidents that forced crews to abandon ships. As a result, traffic through the Strait of Hormuz has fallen sharply, with just 13 vessels transiting Monday and 9 on Tuesday, according to MarineTraffic data.

Concerns are also growing at the Bab el-Mandeb Strait, another critical oil transit route linking the Red Sea to the Gulf of Aden. Iranian-backed Houthi forces in Yemen have threatened a maritime blockade targeting Saudi Arabia, raising fears of broader supply disruptions. While vessel traffic through Bab el-Mandeb remains relatively steady—73 ships transited Tuesday—it has edged lower and signs of hesitation among shippers are increasing.

Market participants warn that simultaneous risks at both chokepoints could significantly disrupt global oil flows. Analysts note that avoidance of the Bab el-Mandeb would force tankers to reroute via the Suez Canal, increasing transit times and costs, particularly for shipments to Asia.

Rising crude prices are also feeding through to refined products. US retail gasoline prices continued to climb, with the national average extending gains above the $4 threshold.