Oil Prices Surge Past $90 Per Barrel as Tensions Rise
The price of Brent crude oil surged past $90 per barrel on July 20, 2026, for the first time since early June, as escalating military hostilities between the United States and Iran renewed fears about shipping safety through the critical Strait of Hormuz. Brent traded at approximately $90.50 per barrel, a 2.72% increase from the previous week’s close, while US benchmark West Texas Intermediate rose to roughly $84.45 per barrel, according to VRT NWS.
Context: A Fragile Ceasefire Collapses
The price milestone marks a dramatic reversal of the brief détente that followed the US-Iran principled ceasefire agreement in mid-June 2026. That agreement had driven oil prices down to approximately $71-68 per barrel, offering hope that the worst of the energy crisis might be over. However, tensions have re-escalated sharply over the past two weeks.
On July 19-20, the US launched its ninth consecutive night of strikes on Iran, while Iran retaliated with attacks on Bahrain and Kuwait. President Donald Trump confirmed the strikes, stating, “We hit them hard again tonight. And we did that in honor of the fallen soldiers,” as reported by NOS.
Key Developments
The Strait of Hormuz — through which approximately one-fifth of the world’s oil trade passes — remains effectively closed. The waterway was first blocked by Iranian forces after the war began in late February 2026, and subsequently by a US blockade. Trump has announced the US would demand a 20% fee on all cargo value passing through the strait as compensation for protection.
OPEC+ agreed on July 5 to increase production quotas by 188,000 barrels per day starting in August, with Saudi Arabia and Russia each contributing 62,000 barrels per day. The cartel stated the adjustment “should help stabilize the oil market,” according to the OPEC+ press release. However, analysts note this modest increase is insufficient to offset the supply disruption from Hormuz.
Direct Impact on European Consumers
The price surge is already hitting European consumers hard. In Belgium, diesel prices jumped to €2.145 per liter — the highest since May 21 — a rise of over 10 euro cents. Heating oil rose by over 5 euro cents to €1.2231 per liter.
Broader economic pressures are mounting. Eurozone inflation rose to 3% in April 2026, up from 2.6% in March, driven primarily by energy prices which were 10.9% higher year-on-year, according to Statbel. Belgian inflation surged to 4.01% in April from 1.65% in March, with energy as the primary driver.
Corporate and Sectoral Fallout
The energy crisis continues to reshape corporate fortunes. Shell’s Q1 2026 profit doubled to $6.92 billion from $3.26 billion a year earlier, benefiting from elevated energy prices despite a 4% production decline due to damage to facilities in Qatar and the Hormuz blockade.
Meanwhile, Ryanair CFO Neil Sorahan confirmed fuel costs had risen by “a few hundred million” euros, despite the airline having hedged 80% of its fuel needs at $67 per barrel. German airports have warned of potential flight cancellations, with ADV CEO Ralph Beisel cautioning that in the worst case, airport capacity could drop by 10%, affecting 20 million passengers.
Analysis and Outlook
The return of oil prices above $90 per barrel represents a significant setback for European economies already grappling with elevated inflation and energy costs. The collapse of the June ceasefire has reignited supply fears, and the modest OPEC+ production increase appears inadequate to offset the disruption.
US Secretary of State Marco Rubio has stated he remains open to negotiations with Iran, “but then it has to be serious,” adding that “people who want to do something positive for Iran” should take the lead. However, with both sides continuing military operations, a swift resolution appears unlikely.
What to Watch
Oil prices are likely to remain volatile and elevated above $90 per barrel as long as the Hormuz crisis persists. Further spikes above $100 are possible if military escalation continues. European governments face continued pressure to provide energy subsidies, straining already tight budgets. The Belgian government’s €80 million temporary energy support package, running from May to July, may require extension.
Longer term, the crisis is accelerating Europe’s energy transition. Heat pump installations in Belgium rose 40% in Q1 2026, and Belgian households increasingly switched to fixed energy contracts. However, the immediate pain of high fuel prices creates significant political challenges for incumbent governments across the continent.