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Oil futures fell over 3% due to disruptions in the Red Sea and heightened U.S.-Israeli-Iran tensions. Brent dropped to $97.10, but is on course for a 10% weekly gain, while WTI is set for an 8% increase amidst fears of further supply constraints.

Futures contracts for oil slumped by more than 3% today, on 24 July, but are on track to record weekly gains amid worsening situation in the Middle East and disruptions in the Red Sea, according to a Reuters report.

Brent futures fell $3.59, or 3.57%, to $97.10 a barrel at 1240 GMT, having settled above $100 in the previous session for the first time since May. It remains on track for an over 10% advance this week, it added.

Further, West Texas Intermediate (WTI) futures were down $3.14, or 3.41%, at $89.05 a barrel, on track for a nearly 8% weekly rise.

Trump’s threats, war in West Asia push oil prices

Notably, in an interview with Axios, United States President Donald Trump told the publication that he is close to making a decision about a “massive attack” on Iran “bigger than ever”. “I am considering a massive attack. Bigger than ever before. I am close to making a decision. We are all set for it,” he told Axios.

He added that he is considering holding the Iranian government responsible for attacks on Saudi oil tankers in the Red Sea by Yemini Houthis. In a post on Truth Social, Trump stated: “If they do this again (Houthis attack), the US will hold Iran responsible, in that the Houthis are a Surrogate and/or Proxy of Iran, and major military punishment will be inflicted upon Iran and, of course, the Houthis, themselves.”

US Secretary of State Marco Rubio told reporters that Trump’s approach to the Iran war as “a head for an eye”, CNBC reported.

Waterways see disruptions due to war

Rystad analyst Janiv Shah told Reuters that disruptions in the Strait of Hormuz appear to be nearing peak levels last seen in March and now outages in the Red Sea “have inevitably driven prices up as supply becomes squeezed once again”.

Daily vessel transits through the Strait of Hormuz were steady at three for each of the past three days, preliminary ship-tracking data from Kpler showed. Another two ships — including empty very large crude carrier Noble — also entered the Gulf via the strait on Thursday, the Reuters report added.

Meanwhile, at the Bab el-Mandeb strait, commodity vessel transits totalled 32 on July 23, up from 26 the day before, Kpler data showed, with two crossings for July 24 so far. “In the right seas, ships are still moving… so it’s not a complete blockade as some might have feared,” said Giovanni Staunovo, a UBS analyst.

Global conflicts to continue to push oil prices

The report added that analysts at JPMorgan in a note said each additional month of disruption to oil supply would add around $7 to $8 a barrel to Brent, lifting monthly average prices to around $114 a barrel if disruptions extend to three months.

Elsewhere, Russia said on Friday that its forces had struck three Ukrainian ports overnight targeting infrastructure — including loading and unloading facilities and fuel reserves — which supported Kyiv’s armed forces.

On Thursday, Kazakhstan’s energy ministry said oil companies temporarily reduced production after suspected Ukrainian drone attacks forced the country’s main Black Sea export terminal to close.

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