Oil prices set for 4% weekly gain as Hormuz risks persist

Crude oil prices were on course for a weekly gain of about 4 percent as the United States and Iran remained divided over a potential peace deal, keeping supply risks elevated.

At the time of writing, Brent crude was trading at $87.84 per barrel, while West Texas Intermediate stood at $82. 45 per barrel.

The gains have been supported by tanker traffic through the Strait of Hormuz remaining at a fraction of pre-war levels, while Washington has threatened to maintain its naval blockade of Iran indefinitely and increase economic pressure on Tehran.

“Despite the bearish crude stock data, the broader geopolitical backdrop is preventing a sharper price decline,” Susan Bell, senior vice president for oil at Rystad Energy, said, according to Reuters.

The geopolitical risk has offset pressure from rising US inventories. ING analysts said US commercial crude stocks increased by more than 17.4 million barrels last week, adding downward pressure on international oil benchmarks.

However, the inventory build has done little to ease concerns over physical crude availability as the conflict between Washington and Tehran continues to disrupt shipping through key Middle Eastern waterways.

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Oil markets have also been weighed down by weaker demand expectations from major energy agencies.

The International Energy Agency expects global oil demand to decline by about 1.6 million barrels per day in the current quarter, while also forecasting a supply shortfall of 1.8 million bpd.

The supply deficit reflects the impact of the conflict and disruptions to crude flows, but has so far failed to provide a stronger boost to prices as traders remain focused on weaker demand and the possibility of a prolonged economic slowdown.

The Organisation of the Petroleum Exporting Countries (OPEC) also lowered its 2026 demand-growth forecast this week.

OPEC expected oil demand to increase by 580,000 bpd, down from its previous forecast of 780,000 bpd issued in July.

The competing supply and demand signals leave the oil market highly sensitive to developments around the Strait of Hormuz.