WTI Crude Hits $84.95 as EIA Reports 7.2-Million-Barrel Draw and Trump Threatens Iran

West Texas Intermediate crude settled at $84.95 per barrel on Tuesday, a gain of $5.69 or 7.18% on the day. Brent crude settled at $90.78 per barrel, adding $6.69 or 7.96%. Three forces converged to drive prices to those levels: a crude inventory draw more than double the prior API estimate, fresh U.S. threats against Iran, and continued Houthi strikes on Red Sea shipping lanes.

EIA Crude Draw Reaches 7.2 Million Barrels, More Than Double the API Estimate

The Energy Information Administration's weekly petroleum status report showed U.S. commercial crude stocks fell 7.2 million barrels for the week ending July 24. Commercial inventories now stand at 404.5 million barrels, 7% below the five-year seasonal average. That draw was 2.19 times larger than the 3.296 million barrel decline the American Petroleum Institute reported on Monday evening.

Refined product data painted a mixed picture. Gasoline stocks edged higher, with average daily production rising to 9.9 million barrels. Distillate stocks gained 1.1 million barrels, though distillate production averaged 5.4 million barrels per day, 9% below the five-year average. Total petroleum product demand averaged 20.3 million barrels per day, down 2.3% year over year, while distillate demand rose 4.7% to 3.7 million barrels per day.

Trump Threats Against Iran Coincide With Federal Reserve Decision

The Trump administration issued fresh threats against Iran on Tuesday morning, triggering a crude price surge before North American markets opened. The warnings came hours before the Federal Reserve released its latest policy decision, compounding the day's market volatility. Houthi forces in Yemen separately claimed an attack on a Saudi Arabian oil tanker in the Red Sea, adding shipping risk premiums to the geopolitical calculation.

Iran also rejected Oman's proposal to divide operational control of the Strait of Hormuz. Tehran demanded broader territorial authority over the passage rather than an even split. The Strait carries roughly 20% of global seaborne oil flows, and shipping disruptions there translate directly to elevated freight rates and tighter crude availability for Asian refiners.

Goldman's $76 WTI Floor Now Sits $8.95 Below Spot

When Oil Authority last reported WTI at $79.28 per barrel, Goldman Sachs' Q4 2026 floor of $76 sat just $3.28 below the market. Tuesday's settlement of $84.95 per barrel places WTI $8.95 above that same floor. Goldman Sachs analyst Daan Struyven maintained the bank's base-case WTI target at $76 per barrel for the fourth quarter of 2026, with a corresponding Brent forecast of $80 per barrel.

Other major forecasters hold materially different views. Morgan Stanley carries the most bearish major bank forecast, targeting Brent at $75 per barrel. The EIA Short-Term Energy Outlook places Brent at $82 per barrel by year-end 2026. UBS projects $85 per barrel under its de-escalation scenario. The spread between the most bearish and most bullish major forecasts spans $10 per barrel, reflecting genuine disagreement about how quickly Middle East risk premiums will unwind by December.

Glencore Reports $3.3 Billion Trading Profit From Volatility Period

Commodity trading house Glencore reported $3.3 billion in trading profits generated during the current period of Middle East market volatility. That figure reflects the scale of price swings since the U.S.-Iran conflict escalated. Henry Hub natural gas also advanced on Tuesday, settling at $2.72 per MMBtu, a gain of 2.18% on the day.