Crude oil prices extended their advance Tuesday as fading hopes for a U.S.-Iran agreement renewed fears of prolonged supply disruptions through the Strait of Hormuz. Brent crude moved above $
Crude oil prices extended their advance Tuesday as fading hopes for a U.S.-Iran agreement renewed fears of prolonged supply disruptions through the Strait of Hormuz. Brent crude moved above $91 a barrel while West Texas Intermediate approached $85, putting geopolitical risk back at the center of the oil market.
Brent futures were up 0.3% at $91.14 a barrel at 0003 GMT on Aug. 18, while U.S. WTI gained 42 cents to $85.04. WTI earlier reached $85.37, its highest level since July 31, while Brent had climbed to its strongest level since July 30.
The latest move followed a deterioration in U.S.-Iran diplomacy. Iran said it would adopt a more offensive military posture after efforts to negotiate a permanent end to the conflict stalled, while Washington ruled out extending the temporary ceasefire. Progress toward restoring normal tanker traffic through the Strait of Hormuz has also slowed.
Brent Breaks Above $90 as Supply Premium ReturnsThe supplied Brent chart captures the speed of the latest move. Brent climbed from around $88.50 to above $90 on Aug. 17, breaking out of an intraday range as traders added a larger geopolitical risk premium.
Brent Crude Oil Intraday Break Above $90. Source: Bloomberg Financial L.P.
That breakout has since extended above $91. The immediate question is whether Brent can hold the psychologically important $90 level. A sustained move above it would keep buyers in control, while a drop back below $90 could suggest that part of the geopolitical premium is fading.
Supply concerns have a fundamental basis. The International Energy Agency said Gulf oil production in July remained 8.3 million barrels per day below prewar levels, while regional exports fell as renewed disruption restricted Hormuz traffic. The IEA now expects the global market to run a 1.8 million-bpd deficit in the third quarter.
WTI Recovery Faces a Bigger Test Above $85The supplied WTI daily chart shows a broader recovery from the July low near $70, followed by another pullback and rebound. Price has now returned to the mid-$80s, but the chart shows heavier resistance approaching the late-July region around $90.
WTI Crude Oil Daily Price Trend and Recovery. Source: X
WTI therefore needs more than a brief push above $85 to confirm another leg higher. Failure to maintain the recovery would bring the $80 area back into focus, while stronger buying could reopen a test of the previous highs.
The Energy Information Administration has also raised its 2026 average price forecasts to $86.81 for Brent and $80.88 for WTI, citing prolonged Middle East production losses.
Huge U.S. Inventory Build Keeps Bulls in CheckThe main bearish counterweight comes from U.S. inventories and the demand outlook. Commercial crude stocks surged 17.4 million barrels to 424.4 million barrels in the week ended Aug. 7, the largest weekly increase since January 2023. The next EIA report is scheduled for Wednesday, Aug. 19.
U.S. Crude Oil Inventories Weekly Change. Source: Investing.com
Demand forecasts are also divided. The IEA expects global oil demand to decline by 1.6 million bpd in 2026, while OPEC still expects growth of about 600,000 bpd.
For now, crude oil prices remain driven primarily by supply risk. Holding Brent above $90 and WTI above the mid-$80s would preserve the bullish setup, but another large inventory build or renewed diplomatic progress could quickly reduce the geopolitical premium.
