The situation in the Middle East continues to disrupt the transportation of crude oil, and market concerns about the tightening of supplies remain. As a result, international oil prices remain high on Fridays, $93 per barrel on Brent Station, and the United States WTI crude oil is close to $87 per barrel, with two benchmark oil prices expected to record higher increases a week in a row.
There's been a drop in traffic in the Strait of Hormuz.
Current oil prices continue to be largely supported by supply risks in the Middle East. Reuter quoted Kpler as saying that there were only 7 commercial ships passing through the Strait of Hormuz on Thursday, down from 14 on the previous day. Prior to the conflict, about one fifth of global oil consumption had to pass through the waterway, so that the slowdown in transport rapidly raised market concerns about short-term supply.
As at 21 August, the Brent Oil Futures Post was 93.55 United States dollars per barrel, a small decline of 0.3 per cent per day; WTI Oil was 86.50 United States dollars per barrel, a decline of 0.4 per cent. But after five consecutive trading days, Brent's cumulative increase this week has exceeded 7 per cent and WTI's 8 per cent.
Increase in inventory and September output
In addition to supply concerns, there are some constraints on basics. In the United States, commercial crude oil stocks increased by 4.4 million barrels to 428.8 million barrels as of August 14, returning to the five-year average. Refineries started at 97.2 per cent during the same period, indicating that United States oil refining activities remained high.
OPEC+ also plans to increase daily production by 188,000 barrels in September. There are only real constraints on the smooth access of new supplies to global markets if transport in the Middle East continues to be hampered. This means that the information on the increase is not, for the time being, sufficient to fully offset the price support associated with geo-risk.
The dollar falls to support oil prices
The weakening of the dollar is also providing additional support for oil prices. As crude oil is denominated in United States dollars, the fall in the United States dollar usually reduces the purchase costs of other currency holders, thus improving demand-side capacity. It was reported that the United States dollar index continued to decline this week and that the short-line movement remained under pressure.
Follow-up effects suggest that the crude oil market will continue to be traded around supply risk in the short term. The International Energy Agency currently projects that global oil demand will decrease by 1.6 million barrels per day in 2026, but at the same time believes that, as a result of supply disruptions, a supply gap of 1.8 million barrels per day may still occur in the third quarter.