LONDON – Brent crude climbed above $87 a barrel on Tuesday, clearing a level not seen since June 12 as the market extended a rally driven by tightening supply signals and sustained concern over Middle East supply risk.
The move brings Brent nearly 1.5% above where it traded at the start of this month, when oil briefly retreated below $83 before recovering. The June 12 high had marked the peak of a prior surge before markets pulled back on expectations that OPEC+ would ease some of the voluntary production cuts it put in place through the first half of 2026.
Those expectations have since shifted. OPEC+ moved more cautiously on loosening output constraints than markets anticipated, and the ongoing US-Iran standoff, which has kept the Strait of Hormuz risk premium elevated, continues to support the floor. The White House said Tuesday it expects only limited disruptions to oil shipments through the strait, Sputnik reported. As Eastern Herald reported earlier Tuesday, Brent had already hit $85.92 on concerns the US-Iran conflict would drain strategic reserve buffers faster than producers could compensate. The move to $87 extended that advance.
The crossing of $87 is a technical threshold that traders have watched since June. Whether it holds depends on whether the production-cut picture becomes clearer in coming days and whether US-Iran tensions escalate or de-escalate. A sustained move above $87 would test resistance near the $89 level where selling pressure emerged in late May.
The recovery in oil prices since early June has been steady rather than dramatic, which has made it easy to underweight in a market focused on geopolitical headlines. But the cumulative move, from below $83 at the start of July to above $87 on Tuesday, represents a meaningful shift in the market’s assessment of supply. Analysts at several investment banks had entered the summer with forecasts for Brent to average around $80 through the second half of 2026. Those forecasts are now under review.
OPEC+ had signaled at its June ministerial meeting that it would hold core production cuts in place through at least September. A subset of members that had been producing above their quotas agreed in June to compensation cuts, reducing output below quota to offset earlier excess. Whether those compensation cuts have been fully implemented remains an open question. Physical market tightness, as reflected in the backwardation on the Brent futures curve, suggests the cuts are having the intended effect on near-term supply.
US Strategic Petroleum Reserve drawdowns, used to suppress prices during the 2022 spike, have left the reserve at historically low levels. The reserve’s capacity to act as a shock absorber in another price surge is more limited than it was four years ago, a factor that adds a structural premium to oil prices at current levels that was not present during the 2022-2023 cycle.
For consumers and governments managing fuel subsidies, the move to $87 adds pressure at a moment when inflation has already been sticky in several major economies. Energy costs feed directly into transport and food prices, making oil’s trajectory a variable with broad macroeconomic weight. WTI crude tracked broadly in parallel, as is typically the case when Brent’s move is supply-signal driven rather than a logistics disruption affecting one benchmark more than the other.
