Oil Price Today: Brent Holds Near $89 as Iran Talks Stall and Hormuz Traffic Slows

Key Takeaways

• Brent crude traded at $88.72 a barrel in early Asian trading, while WTI stood near $82.35.
• Both benchmarks gained more than 5% last week following attacks on tankers and a Saudi refinery.
• Only five commodity vessels crossed the Strait of Hormuz on Saturday, with none recorded on Sunday, compared with 31 the previous weekend.
• Analysts warn that an extended disruption could lift Brent above $110, although a diplomatic breakthrough would remove part of its geopolitical premium.

Oil prices remained close to recent highs on Monday as stalled negotiations between the United States and Iran and a sharp decline in tanker traffic through the Strait of Hormuz kept traders focused on the risk of further supply disruption.

Brent crude futures gained $0.20, or 0.2%, to $88.72 per barrel by 11:50 p.m. GMT. U.S. West Texas Intermediate crude slipped $0.05 to $82.35, according to a Reuters report published by Euronext. Later Asian quotes placed Brent near $89 and WTI around $83.

The relatively modest daily movement followed a sharp advance last week, when both benchmarks climbed more than 5%. The rally was driven by attacks involving tankers operated by Abu Dhabi National Oil Company and an incident affecting a Saudi Aramco refinery.

Strait of Hormuz Traffic Drops Sharply

Physical shipping conditions are becoming more important than diplomatic statements in determining the oil price today.

Kpler ship-tracking data showed that only five commodity vessels passed through the Strait of Hormuz on Saturday. No crossings were registered on Sunday, compared with 31 vessels during the previous weekend.

The slowdown followed several tanker incidents. The United Arab Emirates accused Iran of attacking a third ADNOC-operated vessel on Friday, after attributing two other incidents involving the company’s ships to Tehran the previous evening.

Although the precise impact on exported volumes remains uncertain, fewer vessels entering the waterway could delay crude and refined-product deliveries. It may also increase insurance premiums, freight costs and the amount of time tankers spend waiting for clearance.

The Strait of Hormuz is exceptionally difficult to replace. Approximately 20 million barrels per day of petroleum passed through the route in 2024, equivalent to about 20% of global petroleum-liquids consumption, according to the U.S. Energy Information Administration.

Saudi Arabia and the UAE have pipelines capable of bypassing the strait, but the EIA estimates only about 2.6 million barrels per day of unused bypass capacity is available. Consequently, alternative infrastructure could absorb only a limited portion of any major disruption.

US-Iran Negotiations Show No Breakthrough

Prospects for a rapid diplomatic resolution weakened over the weekend. Iranian Foreign Minister Abbas Araqchi said Tehran had not decided whether to resume negotiations with Washington.

The statement reduced hopes that the two sides were close to an agreement covering the conflict and the restoration of unrestricted commercial shipping through Hormuz. President Donald Trump, meanwhile, indicated that Americans may need to tolerate somewhat higher gasoline prices while the confrontation continues.

The absence of progress leaves oil caught between two scenarios. A settlement could allow more tankers to resume normal routes, potentially pushing crude prices lower. Continued hostilities or additional attacks could intensify the supply premium and send Brent back above $90.

The risk is not limited to Iranian production. The strait serves exporters including Saudi Arabia, Iraq, Kuwait, Qatar and the UAE, making the security of the waterway more important than the output of any single country.

Global Inventories Offer a Smaller Safety Buffer

The latest data suggest the global oil system has less capacity to withstand an extended disruption.

The International Energy Agency reported that observed oil inventories fell by 69 million barrels in July, dropping below 7.9 billion barrels for the first time since April 2025. Stockpiles have declined by approximately 410 million barrels since the conflict began.

The agency now expects global oil supply to decrease by an average of 4.3 million barrels per day in 2026. It also projects a third-quarter market deficit of 1.8 million barrels per day, more than double its previous estimate.

Demand is simultaneously being damaged by higher prices and disrupted supply chains. The IEA forecasts global consumption will contract by 1.6 million barrels per day this year before returning to growth in 2027, according to its August Oil Market Report.

This combination could create volatile price action: limited supply and falling inventories support crude, while weaker demand places a ceiling on how far prices can rise without triggering economic destruction.

Could Brent Crude Rise Above $110?

The duration of the shipping disruption will determine whether Brent can decisively break above $90.

JPMorgan estimates that each additional month of disruption could add approximately $7 to $8 per barrel to Brent. If the interruption lasts three months, the bank projects average monthly prices could reach roughly $114.

Goldman Sachs has outlined a potential rise to $120 if shipping problems persist. Its base case is less extreme, forecasting that Middle East tensions will eventually ease and Brent will average about $80 in the fourth quarter before declining to $75 next year, according to The Economic Times.

For now, $90 remains the immediate psychological level for Brent. A confirmed decline in Hormuz exports could drive a sustained breakout, while credible negotiations and safer tanker passage would likely erase part of the geopolitical premium currently supporting oil prices.

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