Brent Crude Oil Drops Below $87

Brent crude oil fell below $87 a barrel on Thursday, after five consecutive sessions of gains, as investors shifted attention toward weakening demand prospects and continued disruption around the Strait of Hormuz. Traders are closely monitoring how much oil is moving through the key waterway, as diplomatic efforts to end the Iran war and restore normal shipping remain stalled. Meanwhile, major producers including Saudi Arabia and the UAE are seeking alternative ways to maintain exports, with some vessels reportedly switching off transponders while navigating the strait. The International Energy Agency lowered its global oil demand outlook, warning that prolonged conflict and elevated prices are increasingly weighing on consumption. The agency estimates the global market could face a supply deficit of 1.8 million barrels per day this quarter, more than twice its previous forecast. US crude inventories also surged by 17.4 million barrels last week.

Brent crude fell below $88 a barrel on Thursday, ending a six-session rally as investors shifted their focus toward weakening demand prospects and continued disruption around the Strait of Hormuz. The International Energy Agency lowered its global oil demand outlook, warning that the prolonged Middle East conflict and higher prices are increasingly weighing on consumption. The agency estimates the global oil market could face a supply shortfall of 1.8 million barrels a day this quarter, more than twice its previous forecast, while supply remained 6.3 million barrels a day below year-earlier levels in July. Meanwhile, US crude inventories surged by 17.4 million barrels last week, their largest weekly increase since January 2023. Diplomatic efforts between the US and Iran to end the conflict and reopen Hormuz have made little progress, with attacks on shipping continuing and rhetoric intensifying. Despite Thursday’s decline, Brent remained nearly 5% higher for the week.

Brent dropped below $88 per barrel on Thursday, breaking a six-day advance as investors assessed the prospects of any deal to reopen the Strait of Hormuz. President Donald Trump said the US had “total control” over the waterway amid escalating rhetoric between Washington and Tehran, with negotiations remaining deadlocked. The Trump administration is also moving toward imposing greater economic pressure on Iran as the US military campaign has so far failed to force the regime to capitulate. The measures include expanding economic sanctions and enforcing a naval blockade aimed at curbing Iranian oil exports. Meanwhile, the IEA’s monthly report indicated that the global oil market faces a shortfall of 1.8 million barrels a day this quarter as the conflict in the Middle East continues. Elsewhere, EIA data showed US crude inventories rose by 17.4 million barrels last week, marking their largest weekly increase since early 2023.