Ceasefire Collapses: Brent Crude Surges Back Above $85 as Hormuz Risk Returns
- ▸Brent crude jumped back above $84-87 a barrel and futures flipped into backwardation after the June 18 Iran-US ceasefire memorandum broke down in mid-July, reopening the Strait of Hormuz supply risk it had briefly closed.
- ▸Shipping traffic through Hormuz has fallen sharply, and Iran has reportedly threatened a second chokepoint - the Bab el-Mandeb Strait - turning a single-strait risk into a two-strait scenario for Gulf oil exports.
- ▸The move is a live test of the IMF's July forecast that Middle East-driven energy costs would keep global inflation elevated at 4.7% for 2026, with net energy importers facing the sharpest pass-through and exporters outside the conflict zone benefiting from the terms-of-trade shift.
Reviewed by: EconoLens Economics Desk
On June 18, Iran and the United States signed a memorandum of understanding that was supposed to end the shooting and reopen the Strait of Hormuz. It held for less than a month. By mid-July, US strikes had hit an Iranian oil tanker near the country's main export terminal, Tehran had reportedly instructed Yemen's Houthi forces to close the Bab el-Mandeb Strait if Iranian power infrastructure came under attack, and Brent crude - which had fallen below $70 a barrel on the strength of the ceasefire - was back above $84, gaining more than 10% in a single week.
Reading the sequence in order rather than as isolated headlines, this isn't a fresh shock so much as the reversal of a de-escalation the market had already priced in. That distinction matters for how much of the current move is 'new' risk versus previously-discounted risk simply coming back onto the books.
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Cite This Article
EconoLens Economics Desk. (2026, July 17). Ceasefire Collapses: Brent Crude Surges Back Above $85 as Hormuz Risk Returns. EconoLens. https://econolens.co.in/news/oil-ceasefire-collapse-brent-surge-july-2026
The EconoLens Economics Desk byline is used for AI-drafted analysis pending review by a named economist. Articles under this byline have not yet been fact-checked or signed off by a human contributor.