Strait of Hormuz and Oil Chokepoints

The crisis has entered a new phase, and the market's April–June de-escalation has reversed. On July 7 the U.S. revoked a license permitting Iranian oil sales and struck targets inside Iran; three tankers came under attack near Oman. On July 8, President Trump declared the ceasefire over and floated a takeover of the Kharg Island terminal; front-month Brent settled 5.2% higher at $78.02/bbl. Brent settled 9.59% higher again on July 13, at $83.30, and has traded near $85 since — roughly 20% above its July 2 low of $70.65. Reuters reported tanker transits fell to a two-month low by July 13; after the U.S. Navy reimposed its Hormuz blockade, only seven vessels crossed on July 15, down from 13 the day before.

The Strategic Petroleum Reserve, the second buffer that had helped cap prices earlier in the crisis, is now materially depleted: 316.5 million barrels as of the week ending July 10 — the lowest level since April 1983. Roughly 73 million barrels remain on the announced IEA-coordinated release; for context this is almost exactly the maximum drawdown allowed under the statutory floor for non emergencies (252.4 million barrels of reserve). At the completion of this release, the SPR will be lower than law has deemed is the minimum threshold for emergencies, just as we are entering phase 2 of the crisis. Both the diplomatic track and the stockpile buffer that anchored the April–June de-escalation have now been substantially withdrawn, which is the basis for characterizing this as a new era of the crisis.