Oil Stays High Near $84 as US Strikes Iran
Brent traded around $84 on July 16, near a one-month high, even after Trump dropped the Hormuz transit tax. US airstrikes on Iran keep the price elevated and raise import costs for Serbia.
- Brent traded around $84 a barrel on July 16, down about 0.4 percent but near a one-month high after a roughly 12 percent jump over the previous three sessions.
- US West Texas Intermediate stayed below $80 a barrel.
- President Trump abandoned a planned 20 percent levy on cargo passing through the Strait of Hormuz.
- The high price raises the crude import bill for the Pancevo refinery, which supplies about four-fifths of Serbia's fuel.
Brent crude traded near $84 a barrel on July 16, slipping about 0.4 percent from the previous close but holding close to a one-month high. It reached that level after climbing roughly 12 percent over three prior sessions, while US West Texas Intermediate stayed below $80 a barrel.
The market absorbed two opposing headlines on the same day, and the more expensive one won. President Donald Trump withdrew a planned 20 percent tax on every cargo transiting the Strait of Hormuz, arguing that the lost revenue would be recovered through future investment from the Gulf. A tax on the world’s busiest oil corridor would have raised shipping costs and, in theory, the price of a barrel. Scrapping it should have brought relief, but it did not.
The tax is gone, yet the price holds
The reason there is no relief lies a few hundred kilometers to the east. The United States is continuing airstrikes on Iranian missile depots and launch pads near Hormuz, and one-fifth of the world’s oil passes through that strait. As long as there is a risk that escalation could close or slow the shipping lane, the market prices in an uncertainty premium. That premium is stronger than any tax, announced or withdrawn.
For anyone who has tracked the energy sector for two decades, this is a familiar pattern: the price of oil reacts to tankers, not to paperwork. When a tanker has to wait, reroute, or pay higher insurance, the cost feeds into the barrel regardless of what an administration announced that morning. Trump’s claim that Gulf investment will cover the shortfall further suggests the levy was a negotiating lever rather than a fiscal tool.
Two terms that get confused on days like this are worth separating. Brent and WTI are not the same commodity: Brent is the global benchmark that sets the import price for Europe, including Serbia, while WTI is the American grade tied to the US domestic market. The spread between them of roughly $4 to $5 shows that the pressure is heavier on the Atlantic side, which is also where the geopolitical risk sits.
What does the increase mean for Serbian pumps?
The answer runs through Pancevo. The refinery in Pancevo supplies about four-fifths of Serbia’s fuel and imports most of its crude. When the benchmark barrel jumps 12 percent in three days, the input cost rises, and with a lag of a few weeks the price at the pump moves too. The refinery’s margin tightens in the process: the retail fuel price at home is partly held down by the state, while the purchase cost is dictated by a world market that no one in Belgrade can steer.
For the budget and for the consumer, this points the same way. Costlier oil imports widen the trade deficit and weigh on the exchange rate, while a higher pump price feeds inflation through transport and food. The good news is that the 0.4 percent dip at the close halted further gains; the bad news is that the price is holding near its peak, and a single flare-up around Hormuz could wipe out any daily reprieve.
As long as fighter jets are flying over the strait, the market will keep ignoring tax announcements and watching the tankers. A question for you: do you expect the increase on global exchanges to reach Serbian pumps within a few weeks?
