Oil Prices Rise as Strait of Hormuz Risks Keep Supply Concerns High

Oil prices moved higher for a third consecutive session on Tuesday as fading hopes of a lasting United States and Iran agreement increased concerns about prolonged disruption to Middle Eastern energy supplies. Brent crude was trading at $91.07 a barrel, while United States West Texas Intermediate, or WTI, stood at $84.99 a barrel at 1203 GMT, according to Reuters. Both benchmarks had earlier reached their highest levels since late July.

The immediate focus for traders is the Strait of Hormuz. Tanker traffic through the strategic waterway remains severely restricted, while diplomatic efforts between Washington and Tehran have stalled. The situation is also being complicated by renewed security risks in the Red Sea.

Oil benchmark	Price	Daily move	Latest session level
Brent crude	$91.07	+0.22%	Highest since July 30 earlier in session
WTI crude	$84.99	+0.58%	Highest since July 31 earlier in session

Price snapshot: August 18, 2026 at 1203 GMT. Prices can change throughout the trading session.

Why Are Oil Prices Rising Today?

Oil prices are rising mainly because traders are becoming less confident that the United States and Iran will reach an agreement that restores normal shipping through the Strait of Hormuz.

Reuters reported that Iran said the Strait would remain closed until the United States meets conditions connected with an interim agreement. The report followed comments from a senior Iranian official that Iran would adopt a more offensive military posture as efforts toward a permanent settlement stalled.

For the oil market, the key issue is not only the political disagreement itself. The larger concern is whether the conflict continues to interfere with physical crude supplies.

When tankers cannot move normally through a major export route, buyers may have difficulty securing prompt cargoes. Freight costs can also increase, delivery times can become less predictable, and traders may place a higher value on available crude.

That combination is helping keep Brent above $90 and WTI near $85.

What Is Happening in the Strait of Hormuz?

The Strait of Hormuz is one of the most important oil shipping routes in the world. It connects the Persian Gulf with the Gulf of Oman and provides a major export route for crude produced by Gulf countries.

The latest verified EIA data shows how sharply oil movement through the Strait changed during the first quarter of 2026.

EIA estimated that 14.6 million barrels per day of crude oil and petroleum liquids moved through Hormuz in Q1 2026. That compared with 20.7 million barrels per day in Q4 2025.

The decline was significant because the Strait normally handles a large share of international oil trade.

Reuters reported on August 18 that crossings had fallen to very low levels. Some shipments are still taking place, including Saudi crude cargoes arranged through ship to ship transfers near Fujairah in the United Arab Emirates.

This means the market is not dealing with a complete absence of oil from the region. Instead, producers and shipping companies are trying to move available supplies through more difficult and limited channels.

How Much Oil Normally Moves Through Hormuz?

The amount of oil that normally travels through Hormuz explains why traders pay close attention to the waterway.

EIA data for Q1 2026 recorded total oil flows of 14.6 million barrels per day. During Q4 2025, the figure was 20.7 million barrels per day.

The same EIA analysis reported that oil flows through the Bab el Mandeb Strait reached 5.4 million barrels per day in Q1 2026, compared with 5.2 million barrels per day in Q4 2025.

These figures should not be confused with the amount of oil currently moving through the routes. They are historical flow measurements used to understand the importance of these shipping chokepoints.

For current market conditions, tanker traffic and actual export volumes are more important than historical averages.

Why Does Hormuz Matter to the United States?

The United States is less dependent on Persian Gulf oil than several major Asian economies, but American consumers are still exposed to changes in global crude prices.

Oil is traded in an international market. A supply disruption in one major producing region can raise prices for crude purchased elsewhere.

Higher crude prices can eventually affect gasoline, diesel, jet fuel, transportation costs, and other petroleum products in the United States.

EIA reported that higher crude prices had already pushed up United States wholesale gasoline, diesel, and jet fuel prices during the second quarter of 2026, with diesel and jet fuel particularly affected by concerns related to the Strait of Hormuz.

That connection is important for American consumers. Even when domestic oil production remains strong, global crude prices can influence the price paid at U.S. fuel stations.

Can Alternative Routes Replace Hormuz?

Alternative pipelines and export routes can reduce part of the pressure, but they cannot automatically replace every barrel that would normally pass through the Strait.

Saudi Arabia has the East West pipeline, while the United Arab Emirates has the Habshan Fujairah pipeline. These systems allow some crude to reach export facilities without crossing Hormuz.

Saudi Aramco has also resumed some oil loadings from inside the Strait and has offered cargoes that can be transferred ship to ship near Fujairah, according to Reuters.

These measures provide additional flexibility for producers.

However, the capacity of alternative infrastructure is not enough to make the Strait irrelevant. The market therefore remains highly sensitive to changes in tanker movement.

United States and Iran Talks Are Central to the Oil Outlook

Diplomatic developments are now one of the most important short term drivers of crude prices.

Reuters reported that negotiations toward a lasting agreement have stalled. Iran has maintained that the Strait will remain closed until conditions connected with an interim agreement are satisfied, while the United States has rejected the continuation of that arrangement.

A diplomatic agreement could have a quick effect on oil markets.

If traders believe that a deal will allow tankers to return to normal routes, some of the geopolitical premium could leave crude futures.

The reverse is also possible.

If negotiations fail and restrictions continue, traders may expect tighter physical supplies for longer. That could keep prices elevated even if global demand is not particularly strong.

Could the Strait of Hormuz Push Oil Prices Higher?

A prolonged disruption could place additional upward pressure on crude prices.

The main question is how many barrels are actually unavailable to international buyers and how long that shortage lasts.

Oil markets can handle temporary disruptions more easily when producers have spare capacity, inventories are high, and alternative transportation routes are available.

The situation becomes more difficult when several of those protections weaken at the same time.

EIA’s June 2026 outlook said Middle Eastern producers had reduced production by more than 11 million barrels per day compared with pre conflict levels. The agency projected global inventory draws averaging 6.3 million barrels per day in Q2 2026 and 7.6 million barrels per day in Q3 2026 under its then current assumptions.

Those figures are forecasts from the June outlook, not measurements of current August inventories. That distinction is important when evaluating today’s oil market.

What Is Happening to Global Oil Inventories?

Inventories are one of the most important factors for the crude market because they provide a buffer when production and transportation are disrupted.

When inventories fall quickly, buyers have less protection against another supply shock.

EIA’s June forecast expected global stocks to fall sharply during the second and third quarters because of reduced Middle Eastern production and limited shipping through Hormuz. It also said OECD inventories were expected to reach their lowest level since 2003 under its forecast assumptions.

However, inventory data can change quickly.

Reuters reported on August 13 that U.S. crude inventories increased by 17.4 million barrels, the largest weekly increase since January 2023. The report said the inventory increase helped push oil prices lower that day despite continuing geopolitical concerns.

This is an important reminder that geopolitical risk does not guarantee higher oil prices every day.

Supply, demand, inventories, refinery activity, and expectations all influence the market.

Red Sea Risks Add Pressure to Energy Shipping

The Strait of Hormuz is not the only shipping route under pressure.

The Red Sea and Bab el Mandeb Strait remain important to global energy transportation. Security concerns in the region have caused shipping operators to reassess routes and delivery schedules.

Reuters reported on August 18 that Yemen’s Houthis launched missiles at vessels they described as a Saudi military ship and four escort vessels.

The risks around the Red Sea are different from those around Hormuz.

A disruption around Bab el Mandeb can force some vessels to take longer routes around southern Africa. That can increase voyage times, fuel consumption, insurance expenses, and freight costs.

EIA recorded 5.4 million barrels per day of oil flows through Bab el Mandeb during Q1 2026.

The figure demonstrates the importance of the route, but it should not be treated as the current daily flow because the EIA figure is historical.

Brent and WTI Face Different Market Influences

Brent crude is the leading international oil benchmark, while WTI is the main U.S. benchmark.

Both contracts respond to changes in global supply and demand, but their physical market structures are different.

Brent is particularly sensitive to international shipping conditions because of its role in global crude pricing.

WTI also responds to international developments, but U.S. production, inventories, refinery demand, exports, and transportation capacity can influence its price.

The spread between Brent and WTI can therefore change when international supply risks become more important than domestic U.S. conditions.

On August 18, Brent was trading at $91.07 while WTI stood at $84.99 at 1203 GMT.

What Could Push Oil Prices Higher?

Several developments could keep upward pressure on crude prices.

1. A prolonged Hormuz disruption If tanker traffic remains severely restricted, international buyers could face continued supply uncertainty.
2. Further military escalation New attacks involving energy infrastructure, tankers, ports, or export facilities could increase the risk premium.
3. A breakdown in negotiations If diplomatic efforts fail completely, traders may begin pricing in a longer period of disruption.
4. Falling inventories Continued stock declines would reduce the market’s ability to absorb another supply shock.
5. Lower Middle Eastern production A prolonged reduction in regional output would tighten the balance between supply and demand.
6. Higher shipping costs More expensive or restricted transportation can increase the delivered cost of crude.

What Could Push Oil Prices Lower?

There are also several factors that could reverse the recent gains.

1. A lasting U.S. and Iran agreement A credible agreement could reduce fears surrounding shipping and exports.
2. Higher tanker traffic A sustained return of vessels through Hormuz would provide evidence that physical supply conditions are improving.
3. Recovery in Middle Eastern production Bringing previously reduced production back online could increase global availability.
4. Higher inventories Rising stock levels would give buyers greater protection against short term disruptions.
5. Weaker demand High fuel prices can reduce consumption, especially in transportation and other fuel intensive sectors.
6. Lower geopolitical risk Reduced military tension could remove part of the premium currently built into crude prices.

What Is the Oil Price Outlook for 2026 and 2027?

The longer term outlook is more complicated than the current price movement suggests.

EIA’s July 2026 Short Term Energy Outlook expected global crude production and trade flows to move back toward pre conflict levels by the end of 2026, with most previously shut in Middle Eastern production returning during the first quarter of 2027.

The July EIA forecast put the average Brent crude spot price at $82 per barrel for 2026 and $65 per barrel for 2027, after substantially lowering its previous forecast.

That forecast was based on an assumption that shipping through Hormuz would improve following the June 18 memorandum of understanding between the United States and Iran.

This is important because conditions have changed since that forecast.

The latest Reuters reporting on August 18 says peace efforts have stalled and tanker traffic remains heavily restricted.

Therefore, the EIA forecast should be treated as a published scenario based on its assumptions, not as a guaranteed future price.

What Should Oil Traders Watch Next?

The most important indicators are straightforward.

Hormuz tanker traffic: A sustained recovery would suggest that supply problems are easing.

Diplomatic negotiations: Progress between Washington and Tehran could reduce geopolitical risk.

Middle Eastern production: Restored production would increase available crude.

U.S. inventory reports: Large builds can pressure prices, while persistent draws can support them.

Global demand: Weaker consumption can offset part of a supply disruption.

Energy infrastructure: Attacks on refineries, pipelines, export terminals, and tankers could quickly change market expectations.

These factors are more useful than focusing on a single headline because oil prices respond to the combined effect of supply, demand, inventories, transportation, and expectations.

Oil Prices Today: What Comes Next?

Oil prices remain supported by uncertainty surrounding the Middle East, but the next major move will depend on whether the current supply disruption becomes longer lasting.

Brent is currently above $90, while WTI is near $85. Reuters reported that both benchmarks reached their strongest levels since late July during Tuesday’s session.

The biggest bullish risk is a further deterioration in shipping and energy supplies.

The biggest bearish catalyst would be a credible diplomatic agreement followed by a sustained recovery in tanker traffic.

For U.S. consumers, the impact will extend beyond crude futures. Higher oil prices can raise the cost of gasoline, diesel, jet fuel, transportation, and other petroleum products. EIA has already reported that crude supply concerns affected U.S. wholesale fuel prices during the second quarter.

The oil market is therefore entering another sensitive period. Prices may remain volatile while traders assess whether the Strait of Hormuz disruption is temporary or becomes a longer term supply problem.

Frequently Asked Questions

Why are oil prices rising today?

Oil prices are rising because hopes for a lasting United States and Iran agreement have weakened, while restrictions around the Strait of Hormuz continue to raise concerns about energy supplies. Reuters reported that Brent and WTI both reached their highest levels since late July during Tuesday’s session.

What is the Brent crude price today?

Brent crude was trading at $91.07 a barrel at 1203 GMT on August 18, 2026, up 0.22% on the session.

What is the WTI crude price today?

WTI was trading at $84.99 a barrel at 1203 GMT on August 18, 2026, up 0.58%.

Why is the Strait of Hormuz important for oil?

Hormuz is a major international energy shipping route. EIA recorded oil flows of 20.7 million barrels per day through the Strait in Q4 2025 and 14.6 million barrels per day in Q1 2026.

Could oil prices go above $100?

Yes, but that would depend on the severity and duration of supply disruption. A major reduction in exports combined with falling inventories and continued military escalation could create stronger upward pressure. A diplomatic agreement and recovery in tanker traffic could have the opposite effect.

Will oil prices fall in 2027?

EIA’s July 2026 forecast expected Brent to average $65 per barrel in 2027, assuming global production and trade flows recover toward normal levels. That forecast can change if the geopolitical and supply situation develops differently.

How do oil prices affect U.S. gasoline prices?

Crude oil is a major component of gasoline costs. When international crude becomes more expensive, U.S. wholesale fuel prices can also rise. EIA reported that higher crude prices affected gasoline, diesel, and jet fuel prices during the second quarter of 2026.

Sources and Methodology

This article uses Reuters for the August 18, 2026 market prices and current geopolitical developments. Energy market statistics and forecasts are sourced from the U.S. Energy Information Administration.

The Hormuz and Bab el Mandeb flow figures cited in this article are identified by their specific reporting period so historical measurements are not presented as live figures. EIA’s Q1 2026 chokepoint data records 14.6 million barrels per day through Hormuz and 5.4 million barrels per day through Bab el Mandeb.

EIA’s June inventory figures are presented as forecasts from that specific STEO release. The agency projected average global inventory draws of 6.3 million barrels per day in Q2 2026 and 7.6 million barrels per day in Q3 2026.

The July EIA forecast projected average Brent prices of $82 per barrel in 2026 and $65 per barrel in 2027. Because the forecast depends on assumptions about the Strait of Hormuz and Middle Eastern production, it should not be interpreted as a guaranteed future price.

Market data note: The Brent and WTI prices in the opening section are a snapshot taken at 1203 GMT on August 18, 2026. Crude prices change continuously during trading and should not be treated as live prices after that time.

Editorial note: This article provides market information for educational purposes and does not constitute investment advice. Readers should verify current prices, market conditions, and official data before making financial decisions.