Oil prices jump as US-Iran conflict escalates again

Energy & Environment Oil prices jump as US-Iran conflict escalates again Comments: by Rachel Frazin - 07/14/26 1:31 PM ET Comments: Link copied by Rachel Frazin - 07/14/26 1:31 PM ET Comments: Link copied

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Oil prices have jumped over as the conflict between the U.S. and Iran heats back up.

U.S. benchmark WTI crude was trading at about $79 per barrel on Tuesday, up from about $74 per barrel since the start of trading on Monday morning and about $72 late last week. International benchmark Brent crude was similarly trading at about $85 per barrel on Tuesday, up from about $79 per barrel early Monday and about $76 late last week.

“The oil market is reacting to first the Iranian attacks on oil tankers over the weekend, as well as one early this morning, and the subsequent retaliation by the United States attacking facilities in Iran,” said Andy Lipow, president of Lipow Oil Associates.

“Continuing attacks like this on tankers is going to reduce the tanker traffic as the risk of being targeted and hit by a missile or drone increases, and so the oil market is reacting accordingly, and we’re seeing higher prices,” Lipow said.

Prices have fluctuated since the start of the conflict earlier this year, as Iran was effectively able to close the Strait of Hormuz, a key oil shipping channel off its coast.

Prior to the conflict, about 20 percent of the world’s oil transited the strait. After the U.S. and Iran signed a ceasefire memo, the strait opened back up, but the dissolution of that ceasefire and subsequent attacks have once again thrown the situation into disarray.

“The ship owners are moving back to the sidelines and holding pending new information that maybe it can be safe again,” said Clay Seigle, nonresident scholar in energy security at the Center for Strategic and International Studies.

“The most recent activity is serious military attacks on ships.”

For now, Seigle said, “I do think that there will be some risk tolerant actors that continue to go for it, but it’s slowing to a trickle.”

“That’s that that’s the headline for the oil market and for those that are concerned about the economy and the prospect for inflation to to be rekindled,” he added.

The conflict ramped up over the weekend as Iran fired at a commercial ship in the Strait of Hormuz. Both countries exchanged fire in the days that followed, and Iran also hit other countries in the region, including Jordan and Qatar.

The United Arab Emirates said Monday that Iran struck its tankers and killed a crew member.

Strikes continued into Tuesday.

Meanwhile, President Trump on Monday also said the U.S. would impose a blockade on the Strait of Hormuz. He said that the U.S. should be the “guardian” of the strait.

He also said he would impose a 20 percent toll on ships exiting the waterway, but later backed off on that claim.

“Based on highly productive conversations with Middle East leadership, I have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States,” Trump wrote on Truth Social.

“Those Investments will be MASSIVE but, at the same time, extraordinarily good for them, and their future.”

As tensions escalate, fewer ships have been recorded crossing the Hormuz Strait.

According to MarineTraffic.com, confirmed crossings of the waterway fell by about 52 percent week over week during the period between Friday and Sunday. On Monday, confirmed crossings kept declining.

Lipow said that the increase is “not good news” for consumers at the pump.

“Gasoline prices are expected to go back above $4 a gallon and diesel prices are going to head back to over $5 a gallon over the next seven to 10 days,” he said.

As of Tuesday, the average U.S. gasoline price was about $3.86 per gallon, according to AAA.