Oil prices rose by $1 a barrel in the second week of July on growing tension in the Middle East. Spot Brent was trading at $74.52 a barrel on 12 July, compared with $73.53 a barrel a week earlier.
The seizure of two Israeli soldiers by Hezbollah on 12 July prompted Israel to bomb key infrastructure in Lebanon and impose an air and sea blockade on its northern neighbour. Iran was also back in the headlines on the same day, when Tehran was referred back to the UN Security Council for failing to respond to a package of incentives aimed at resolving the nuclear stand-off. The oil market was hit by the weekly inventory report issued on 12 July by the US Energy Information Administration. It stated that commercially available stocks shrank by 6 million barrels to 335.3 million barrels.