Oil Prices Surge Amid Dual Chokepoint Threats, Inventories Rise

Oil prices surged nearly 4% on Wednesday, July 22, 2026, as escalating threats to two critical Middle Eastern shipping chokepoints intensified global supply fears. The Iran-aligned Houthis are threatening to block the Bab el-Mandeb Strait, according to OilPrice.com, which would choke supply from Saudi Arabia's Red Sea port of Yanbu. This comes amid ongoing risks to shipping through the Strait of Hormuz.

Brent crude futures jumped 3.75% to trade at $94.42 per barrel, while West Texas Intermediate (WTI) rose 3.69% to $87.45, OilPrice.com reported. The price rally followed reports that Houthi forces have completed preparations to attack shipping, with missiles and drones positioned near Bab el-Mandeb. In response, three Saudi oil tankers executed U-turns in the Red Sea on Tuesday after the Houthis declared a blockade.

The supply disruptions are not confined to the Middle East. Analysts at ING noted that Russia's CPC terminal on the Black Sea has stopped receiving oil from Kazakhstan due to ongoing attacks on tankers, further supporting prices, according to OilPrice.com.

The price surge occurs alongside a reported build in U.S. crude inventories. Data from the U.S. Energy Information Administration (EIA) released Wednesday showed commercial crude stocks rose by 2.0 million barrels for the week ending July 17, bringing total inventories to 411.7 million barrels, OilPrice.com reported. Despite the build, stockpiles remain 6% below the five-year average for this time of year.

The EIA data also showed builds in refined products. Motor gasoline inventories increased by 800,000 barrels, while middle distillate stocks rose by 1.4 million barrels. Distillate inventories are now 10% below the five-year average. Total U.S. oil demand, measured by products supplied, averaged 20.4 million barrels per day over the last four weeks, down 1% year-over-year.

The global supply threats are reshaping trade flows and prompting importers to seek alternatives. Pakistan's refiners, for example, are actively inquiring about crude oil supply from the United States, Nigeria, Singapore, and central Asia, according to OilPrice.com. The country's oil minister directed refinery executives to immediately identify alternative sources to ensure uninterrupted supply amid the dual threats to the Strait of Hormuz and the Bab el-Mandeb Strait.

For Bakken operators, the price rally driven by geopolitical risk provides a stronger revenue backdrop, though the concurrent rise in U.S. inventories suggests domestic supply remains robust. The inquiry from Pakistan for U.S. crude also highlights potential incremental export demand for American barrels, including those sourced from North Dakota, as global buyers diversify away from troubled Middle Eastern supply routes.