Oil Falls on Hopes for Easing Middle East Tensions; WTI Near $82
Summary
- WTI, the US benchmark crude, traded near $82 a barrel and fell about 6% this week, Bloomberg reported.
- Concerns over supply disruptions eased somewhat as the latest US economic sanctions on Iran did not immediately include tougher measures, while hopes grew for progress in negotiations over the Strait of Hormuz.
- Even so, global oil prices are still up more than 40% this year as the prolonged Middle East conflict continues to disrupt energy supplies from the Persian Gulf.
Forecast Trend Report by Period
Oil fell after a volatile session as diplomatic progress around the Strait of Hormuz offset rising tensions between Russia and Ukraine.
West Texas Intermediate traded near $82 a barrel on August 26, down about 6% for the week, Bloomberg reported. Brent settled below $88 a barrel.
Crude climbed briefly a day earlier after reports that Russian President Vladimir Putin planned to escalate the offensive against Ukraine. The gains evaporated after Iranian military authorities said they had reached an agreement on revenue sharing through Oman and the Strait of Hormuz.
Recent declines in oil prices have been driven partly by hopes for progress in negotiations over the Strait of Hormuz. Concerns over supply disruptions also eased after US economic sanctions on Iran announced this week stopped short of immediately imposing tougher measures on countries doing business with Tehran.
Expectations have also grown that crude shipments from the Persian Gulf may gradually increase. President Donald Trump said on August 25 that about 10 million barrels of oil passed through the Strait of Hormuz in a single day.
Iran, however, has repeatedly said the navigation-related agreement does not mean the strait will immediately reopen in full. Even so, oil is still up more than 40% this year after six months of conflict in the Middle East disrupted energy supplies from the Persian Gulf.
