By Maha Shahid
July 25, 2026 2:00 pmOil prices are rising again as renewed conflict between the US and Iran revives geopolitical risk premiums, but the rally remains significantly weaker than the surge seen at the start of the war as ample supply buffers and expectations of political pressure on the Trump administration limit speculative buying.
Brent crude rose about 43% in the first three weeks after the war began on Feb. 28, reaching as high as $119.5 a barrel, around 65% above its pre-war level.
By contrast, since US President Donald Trump announced that the ceasefire had ended and fighting between the US and Iran resumed on July 8, Brent has gained about 24% over roughly three weeks.
Prices climbed about 14% during the week beginning July 20, briefly topping $102 a barrel on Thursday before falling nearly 4% on Friday to trade below $97.
Although Brent has continued to advance since the ceasefire collapsed, the rally has remained well below the surge seen during the initial phase of the war.
Analysts say the more moderate price increase reflects the absence of the physical supply disruptions many market participants had feared, ample global inventories, large volumes of crude already at sea and expectations that Trump has a political incentive to prevent oil prices from rising too sharply.
Trump’s announcement that he intends to seek another term in 2028 has further increased the political significance of November’s midterm elections, renewing focus on potential measures by his administration to keep gasoline prices under control.
The midterm elections are widely viewed as the most important test of public support for the Trump administration. With the economy, inflation, fuel prices and developments in the Middle East expected to dominate the political agenda ahead of the vote, analysts say Washington could intensify diplomatic efforts to prevent further escalation in the region while also taking steps to limit any sharp rise in oil and gasoline prices before November.
– Trump’s comments influence short-term price moves
Homayoun Falakshahi, head of crude oil analysis at Kpler, told Anadolu that the recent rise in oil prices is largely driven by a higher geopolitical risk premium, but several factors are preventing a repeat of the sharp rally seen at the start of the conflict.
He said record volumes of crude held at sea following the reopening of the Strait of Hormuz in June, together with China’s large crude inventories, have provided the market with a significant short-term buffer.
Falakshahi also said expectations that the Trump administration will seek to prevent a sharp rise in oil prices ahead of the November midterm elections are helping to curb speculative buying.
“Many market participants believe that the administration has a strong political incentive to prevent oil prices from overshooting ahead of the midterm elections, and this expectation itself may be helping to limit speculative buying,” Falakshahi said.
“President Trump has only limited direct control over global oil prices, which are ultimately determined by supply-demand fundamentals and geopolitical developments. However, he has demonstrated an ability to influence market sentiment,” he added.
– Headlines shape market sentiment
Fereydoun Barkeshli, president of the Vienna Energy Research Institute, said oil markets have entered an unusually speculative period, with investors continuing to price in an eventual normalization of supply rather than a prolonged disruption.
He said markets have reacted far less aggressively to recent developments in the Middle East than they did during the initial phase of the conflict.
“Market participants are reluctant to cope with this crisis of such a gigantic magnitude, as it involves the blockade of the world’s most important maritime chokepoint. There is suspicion that paper trading is being manipulated in a manner that caps prices,” Barkeshli said.
“It is no secret that President Trump advocated lower oil prices even during his previous term. Markets are headline-driven, and headlines shape perceptions and narratives. Nevertheless, the physical market reflected a different reality, and the differentials between futures and physical markets widened unusually,” he added.
– Options to lower fuel prices remain limited
Aaron Kildow, Sparta’s commodity owner for crude oil, said the Trump administration has few realistic tools to bring down gasoline prices before the midterm elections.
He said restricting exports of refined petroleum products could theoretically increase domestic fuel supplies but would risk disrupting fuel availability for US allies and carry significant unintended consequences.
Kildow said the most effective way to lower oil prices would be to end the conflict and restore normal oil flows.
“The best thing President Trump could do is end the war and help return flows to some form of normalcy,” Kildow said.
He added that while US crude production continues to grow, most of the increase comes from light, sweet crude, which cannot fully replace the medium-grade barrels traditionally supplied from the Persian Gulf.
We use cookies on our website to give you a better experience, improve performance, and for analytics. For more information, please see our Cookie Policy By clicking “Accept” you agree to our use of cookies.
Read More