Fading supply recovery hopes lift oil and European gas

2026-07-08

North Sea Brent also in high ground

Crude prices rebounded sharply. Optimism over a normalization in supply faded, and in trade on the 8th, the front-month August WTI (West Texas Intermediate) futures contract briefly hit the mid-$75 a barrel level, its highest in two weeks.

North Sea Brent, the European benchmark, also climbed to the $79 range, entering territory not seen in two weeks. Following the exchange of attacks between the United States and Iran on the 7th, expectations for a supply increase that the market had already priced in retreated, easing downward pressure on prices, said Yuuki Togano, a researcher at the Japan Research Institute. Prices also moved higher after remarks by U.S. President Donald Trump in the evening of the 8th Japan time.

Warnings over Middle East supply

Since mid-June, when the two countries signed a memorandum, traffic has been gradually resuming through the Strait of Hormuz, which had remained effectively blockaded, and crude had been trading near late-February levels just before the U.S.-Iran clash. This time, however, the United States moved to restart a ban on imports of Iranian crude, sharpening market concern. Expectations for a rise in Iranian crude supply weakened, while Iran pushed back against tighter U.S. sanctions, stoking fears that Middle East supply could again be disrupted by restrictions on passage through the Strait of Hormuz and other bottlenecks.

Even so, despite the temporary easing of the import ban, many Western countries have not been actively buying Iranian crude, and the actual impact of the exclusion on supply and demand is seen as limited. The view that the United States, which wants an early deal, may move to compromise and resume talks toward a final agreement has not significantly faded. One oil analyst said the two sides could soon reaffirm their implementation of the memorandum, with the United States possibly lifting sanctions and bringing the situation under control. With optimism having spread in the market, prices are likely to remain sensitive to signs that supply recovery will lag initial expectations, and choppy moves may continue for some time.

European gas hits one-month high

European gas prices also surged. The benchmark Dutch TTF briefly rose to the 49 euro per megawatt-hour range as of the evening of the 8th Japan time, up about 5% from the previous close, returning to its highest level in a month since June 11, when news broke of a ceasefire deal between the United States and Iran.

Behind the move was reporting that an LNG tanker operated by Qatar Energy, Qatar's state-owned energy company, had been targeted while sailing near the Strait of Hormuz. Masanori Odaka, senior analyst at European research firm Rystad Energy, said the recovery in supply after the ceasefire agreement will not be straightforward.

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