Crude rose to two-week high on lower US oil production forecast, Red Sea tensions

Crude oil prices climbed to their highest levels in two weeks on Tuesday, 08 July 2025, buoyed by a confluence of bullish drivers ranging from a lower US production outlook to renewed geopolitical tensions in the Middle East.

Brent crude futures settled 57 cents higher, or 0.8%, at $70.15 a barrel, 

WTI crude gained 40 cents, or 0.6%, to close at $68.33 a barrel. 

Both benchmarks have extended recent gains, driven in part by technical short covering and growing market sensitivity to global supply disruptions.

The US Energy Information Administration (EIA) added upward pressure to prices with a revised production forecast, now projecting lower output for 2025. The agency attributed the adjustment to softer oil prices earlier this year, which have discouraged upstream investment and drilling activities. 

Meanwhile, the security landscape in the Middle East once again raised alarm bells for energy markets. Renewed attacks by Yemen’s Houthi militants on commercial vessels in the Red Sea have revived concerns over safe passage through the critical Bab el-Mandeb Strait. Although tanker traffic has remained subdued since a sharp drop in late 2023, the latest escalation threatens to destabilise a region responsible for a significant portion of global oil flows.

-end-