Oil prices rose above $90 a barrel on July 20, 2026, as the United States launched its 10th straight night of attacks against Iran and a ship was hit in the Strait of Hormuz (Reuters; AP News; CNBC).

The Strait of Hormuz is a narrow strip of water between Iran and Oman. Before the war, about one-fifth of all the oil in the world passed through it. The US military said its strikes were meant to force the Strait back open, because Iran has tried to shut it down since the fighting started (The Guardian; Al Jazeera). Iran responded by attacking US military bases across the Middle East, according to Al Jazeera's live blog dated July 21.

The war began on February 28, 2026, when US and Israeli forces launched joint strikes on Iran (Britannica). The IMF's PortWatch platform has tracked fewer ships passing through the Strait since that date, calling it "Trade disruptions in the Strait of Hormuz due to attacks on commercial ships" (IMF PortWatch).

Iran's Revolutionary Guards said two oil tankers were stopped in the Strait, Reuters reported around July 21 (Reuters). The latest tanker attack happened early Tuesday, July 21, per CNBC. Saudi Arabia's oil exports fell for a third month in a row as of July 21, Reuters separately reported (Reuters.

How Big Is the Disruption?

The IMF put a number on it. In a blog post dated July 15, 2026, the Fund said the war "effectively closed the Strait of Hormuz, cutting off some 20 million barrels a day of crude oil and refined products, a fifth of global consumption" (IMF Blog). That matches what the world looked like before the war: about 20% of global oil supplies flowed through the Strait (Reuters). An earlier IMF blog, published March 30, called it "the largest disruption to the global oil market" (IMF Blog).

Oil prices climbed through July as the pressure built. Reuters reported a 2% rise to a one-month high on July 14 as the fighting intensified, followed by more gains on July 17 amid renewed hostilities and threats of Red Sea closure (Reuters; Reuters). Brent crossing $90 on July 20 was the latest jump.

On May 29, the heads of the IEA, IMF, World Bank Group, and WTO issued a joint statement warning that if shipping through the Strait did not return to normal, the world's stored oil supplies would keep shrinking fast right before summer, when demand is highest (IMF). The IEA published its July Oil Market Report on July 10, covering supply, demand, stocks, prices, and refinery activity through the conflict period (IEA).

What's Happening on the Ground

US Secretary of State Marco Rubio said on July 19 that the strikes were targeting Iranian assets used to attack global commercial shipping (US State Department). The State Department issued a Worldwide Caution on July 20 advising American citizens to be extra careful, and is hosting Foreign Ministerial Meetings from July 19 through July 23 (US State Department; US State Department.

Defense Secretary Pete Hegseth and Chairman of the Joint Chiefs of Staff Dan Caine publicly praised the success of a US military overnight strike on three Iranian nuclear sites, which used 30,000-pound bombs called GBU-57 "massive ordnance penetrators" against the Fordow Fuel Enrichment Plant. The US military described that strike as "historically successful" (US Department of Defense; US Department of Defense.

Why This Matters for You

The bigger picture here is that the world is running low on backup oil supplies. The IMF's July 15 report, titled "The Oil Market Absorbed the War Shock — But Buffers Are Running Low," described it this way: the market handled the initial loss of 20 million barrels a day through Hormuz, but stored supplies have been draining faster all summer. Think of it like a family using its savings account to cover a lost paycheck — you can get by for a while, but eventually the money runs out. The joint warning from the IEA, IMF, World Bank, and WTO back in May spelled out this risk. Oil above $90 in late July suggests the market is now reacting to exactly what those organizations warned about. Saudi Arabia's oil exports falling for a third straight month is hard proof that this is not just about traders guessing on prices — actual oil is not getting through.

For your money, a few things are worth watching. The IMF called this the "largest disruption to the global oil market" back in March, but by July said the market had "absorbed" the shock. That gap tells you the market coped at first by using stored oil and finding other routes, but those options are wearing thin. The State Department is holding diplomatic meetings through July 23 while also launching a 10th night of strikes, which means no ceasefire appears close. The US is pushing hard militarily while looking for a diplomatic exit at the same time. The strikes on Iran's nuclear sites, called "historically successful," mean the US has expanded beyond protecting shipping to targeting Iran's nuclear program, which raises the stakes of the conflict significantly.

When oil stays above $90, it pushes up the price of gasoline and diesel, which feeds into inflation — the rate at which prices rise across the economy. That makes things harder for the Federal Reserve, which sets interest rates that affect your mortgage, credit card, and savings rates. For countries that produce oil, higher prices help their budgets. For countries that buy oil, it hurts. Energy companies see bigger profits, but if prices go too high, people drive less and buy less, which can actually hurt the economy and cap how high prices can go. The big question is whether the Strait of Hormuz reopens, or whether the 20% of global oil that used to flow through it finds another way to market. So far, it has not.