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Oil prices closed more than $1 a barrel higher on Friday, capping July with the strongest monthly gains since March, as reports out of Iran that tankers were forced to turn back in the Strait of Hormuz stoked fresh concerns over global crude flows.

Brent settled at $90.12 a barrel, up $1.09 or 1.2%, while US WTI finished at $84.67, up $1.08 or 1.3%. Both benchmarks posted sharp monthly advances, with Brent climbing 24% and WTI adding 21% over July, marking one of the strongest single-month rallies either grade has logged in years.

The price surge unfolded against a mixed supply and demand backdrop. EIA data released Friday showed US crude output slipping about 2% in May from April's record high, even as exports climbed to a fresh record for the second straight month. On the demand side, elevated prices appear to be taking a toll: total consumption of crude and petroleum products fell more than 3.5% in May to roughly 20.1 million barrels per day, the weakest reading since March 2025.

Despite the demand pullback, forecasters remain bullish on price direction. A Reuters poll of 31 economists and analysts pegged 2026 Brent crude at an average of $85.22 a barrel, an upward revision from June's forecast of $84.50, suggesting the market still expects supply risk to outweigh softening consumption in the months ahead.

Written by: Farid Muzaffar