Key Highlights

  • Crude oil rose toward $86 per barrel, extending gains for a fourth consecutive session.
  • President Trump said there were no ongoing negotiations with Tehran while the US naval blockade remains in effect.
  • Eight attacks on vessels transiting Hormuz have been reported so far this month.
  • EIA data showed US crude inventories rose 4.405 million barrels to 428.8 million barrels, a third consecutive weekly increase.

A Fourth Straight Session of Gains as Diplomacy Stalls

Crude oil rose toward $86 per barrel on Wednesday, extending gains for a fourth consecutive session as the US and Iran showed little indication of reaching an agreement to end the conflict and reopen the Strait of Hormuz, keeping Supply concerns elevated. President Donald Trump said there were no ongoing negotiations with Tehran while confirming that the US naval blockade remains in effect.

Shipping risks in Hormuz also remain despite Trump's claim that the waterway is open and mines have been cleared, with limited traffic still passing through the strategic route. Iranian forces have intensified hostilities over the past week, while eight attacks on vessels transiting Hormuz, including ships linked to the UAE and Saudi Arabia, have been reported so far this month.

Official Data Confirms a Third Straight Weekly Build in US Crude Stocks

In the US, industry data showed crude inventories fell by 328,000 barrels last week, following a 9.07 million-barrel increase in the previous week, an early estimate that contrasted with the subsequent official EIA report. That report showed US crude inventories rose by 4.405 million barrels to 428.8 million barrels in the week ended August 14, marking a third consecutive weekly increase, while crude stocks at the Cushing, Oklahoma delivery hub fell by 1.314 million barrels.

Refinery crude runs rose by 216,000 barrels per day, while US gasoline stocks rose by 0.688 million barrels to 209.4 million barrels. Distillate stockpiles, which include diesel and heating oil, fell by 1.53 million barrels to 105.6 million barrels, and net US crude imports fell by 1.754 million barrels per day, a mixed set of figures that nonetheless confirmed a build in the headline crude number despite the earlier industry estimate pointing to a draw.

Balancing Persistent Shipping Risk Against a Well-Supplied Domestic Market

Crude oil's near term trajectory will likely continue to be shaped primarily by developments in the Strait of Hormuz standoff, given how directly the ongoing attacks on shipping and the absence of active negotiations have driven prices higher over the past four sessions. Should Iranian forces continue intensifying attacks without a corresponding diplomatic breakthrough, prices could extend their current gains.

However, the third consecutive weekly build in US crude inventories, confirmed by official EIA data despite the earlier industry estimate showing a draw, suggests the domestic market remains relatively well supplied even as geopolitical risk premium continues building. This divergence between a well-stocked domestic market and an escalating international shipping risk illustrates how the current rally is being driven primarily by geopolitical rather than fundamental supply factors.

Conclusion

Crude oil's extension of gains toward $86 a barrel for a fourth consecutive session underscores how the unresolved Strait of Hormuz standoff continues to dominate price action, even as official US inventory data confirms a well-supplied domestic market. Whether prices continue climbing may depend on whether diplomatic engagement between Washington and Tehran resumes or whether attacks on Hormuz shipping continue escalating. The contrast between rising geopolitical risk premium and a third consecutive weekly build in US crude stocks highlights the international rather than domestic nature of the current price drivers.