Oil Jumps to $88, Gold Sinks to Eight-Month Low
Brent settled at $88.10 a barrel on July 17 after a 4.6% jump, while gold slid to its lowest since November 2025 as Gulf escalation and a threat to the Strait of Hormuz reshaped markets.
- Brent jumped about 4.6% and settled at $88.10 a barrel, while U.S. WTI rose about 4.5%, to roughly $82.
- Gold fell to levels last seen in November 2025, in a band of about $3,965 to $4,016 an ounce, despite the wartime tension.
- The Strait of Hormuz, which carries about 20% of the world's oil, remains disrupted after the Gulf strikes.
- Kuwait reported an attack on a power plant and a water desalination facility, where a fire broke out.
Brent settled at $88.10 a barrel on July 17, a daily gain of about 4.6% and the sharpest single-day move in the crude benchmark since the escalation between the United States and Iran began. U.S. WTI followed the same path and rose about 4.5%, to roughly $82 a barrel. The trigger was not a new sanction or an OPEC decision but a military development in the Gulf: in a single session the market priced in a risk premium it had shrugged off only a day earlier.
Kuwait said Iran had hit a power plant and a water desalination facility, where a fire broke out. Iran, for its part, said it had struck U.S. targets in Bahrain, Kuwait, Qatar and Jordan. For the oil market the decisive factor is not the damage to any single site but the geography: each of those flashpoints sits along the Strait of Hormuz, the chokepoint through which about 20% of global oil supply passes. As long as that corridor is under threat, traders build in a premium for a supply cutoff, regardless of how many barrels were actually lost.
The Gulf Sets the Price of a Barrel
The losers are clear: net energy importers and airlines, for which fuel is the largest variable cost, along with central banks trying to force inflation down. The winners are producers with spare capacity and refiners whose margins widen when the spread between crude and refined products grows. For Serbia, which imports most of its oil, Brent at $88 means pressure on the import price and, with a lag, on pump prices.
For context, only a day earlier Brent was trading near $84 and gold was sliding toward $4,000 an ounce. In little more than 24 hours the balance flipped: oil surged and gold kept falling. That is an unusual pairing, because a geopolitical escalation typically lifts both at once.
Why Is Gold Falling While the War Escalates?
At first glance it looks like a paradox, since gold normally serves as a safe haven in a crisis. This time it fell to levels last seen in November 2025, in a band of about $3,965 to $4,016 an ounce. The explanation lies in rate expectations and the dollar: when an oil spike threatens to prolong inflation, the market trims its bet on quick rate cuts, bond yields rise, and gold, which pays no yield, loses its appeal. A stronger dollar adds further pressure on the ounce. In other words, the same shock that lifts oil undermines the case for gold.
For investors and for Serbia’s budget, the question is not whether the risk premium is justified but how long it will last. If the Strait of Hormuz stays open, the premium usually melts away within a few weeks; if the corridor closes even partially, $88 becomes a starting point rather than a ceiling. Will the market test $90 next week, or slip back below $85?
