Oil Prices Rise Amid Strait of Hormuz Tensions, Bakken Differential Widens

Oil prices extended gains on Thursday, July 9, following a surge the previous day, as renewed military conflict between the U.S. and Iran rattled global markets and threatened flows through the critical Strait of Hormuz. West Texas Intermediate (WTI) crude was trading at $73.97 per barrel, up $0.45 (0.61%), while Brent crude rose to $78.66, a gain of $0.64 (0.82%), according to live price data.

The price action follows a dramatic 5% jump on Wednesday, with prices hitting a two-week high at one point. The rally was triggered by a rapid escalation in the Middle East, according to a report from OilPrice.com. On Tuesday, Iran attacked three commercial ships, including an oil tanker and an LNG carrier, in the Strait of Hormuz. The U.S. retaliated with strikes on multiple targets in Iran, and Iran subsequently struck U.S. bases in Bahrain and Kuwait.

This flare-up has effectively ended a ceasefire and a related memorandum of understanding from mid-June, with former U.S. President Donald Trump stating the agreement was "over," OilPrice.com reported. The U.S. also revoked a temporary sanctions waiver that had allowed Iran to sell oil and petrochemicals.

Analysts at ING said the market reaction shows participants were "far too relaxed about the risks surrounding the deal — and far too bullish on how quickly regional supply could rebound." The security deterioration caused tanker traffic at the Strait of Hormuz to collapse on Wednesday and into Thursday as vessel operators paused transits.

For Bakken operators, the geopolitical premium provides a stronger price floor for WTI, but the region's crude is trading at a wider discount. The Bakken differential was recorded at -$3.42 versus WTI on Thursday. This means Bakken crude at the wellhead is priced approximately at $70.55 per barrel. While the absolute price rise is supportive, a widening differential can offset some of the benefit, compressing margins for producers who sell at the local hub.

Natural gas prices showed little movement amid the oil volatility, trading at $3.20 per MMBtu, down $0.01. The focus remains squarely on crude supply risks. The events underscore the persistent fragility of Middle East supply routes and their immediate impact on global oil benchmarks, which directly influence planning and revenues for North Dakota's shale producers.