Oil Holds Decline Amid Hormuz Stalemate

Crude oil traded near $81 per barrel on Friday after declining in the previous session, as investors adopt a wait-and-see mode while monitoring diplomatic efforts to reopen the Strait of Hormuz. Despite the ongoing impasse, crude continues to flow out of the Persian Gulf, with some tankers sailing with their transponders switched off, although vessels navigating Hormuz remain exposed to persistent threats. The US also claims that as much as 9 million barrels of oil per day is currently transiting the waterway, while the capacity of US forces to escort tankers continues to expand. On the demand side, the IEA cut its global oil demand outlook this week, warning that prolonged conflict and elevated prices are increasingly weighing on consumption. OPEC also lowered its 2026 global oil demand growth forecast to 580,000 barrels per day, marking its fourth consecutive downward revision.

Crude oil fell to around $81 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.

Crude oil fell below $81 a barrel on Thursday, after five consecutive sessions of gains, 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, oil remained nearly 5% higher for the week.