Oil prices are rising amid uncertainty over shipping through the Strait of Hormuz
Oil prices rose on the morning of August 19 amid uncertainty over whether ships would be able to pass through the Strait of Hormuz. Brent futures gained 26 cents, or 0.29%, to $91.28 per barrel as of 00:04 GMT. U.S. West Texas Intermediate (WTI) crude rose 37 cents to $85.31 per barrel.
Both contracts closed on August 18 at their highest levels since July 24, as hopes for peace between the U.S. and Iran faded. U.S. President Donald Trump stated that negotiations with Iran are not taking place and that the Strait of Hormuz is open to shipping. This contradicts Iran’s statement, which claims that the vital waterway remains closed to shipping.
The temporary ceasefire agreement expired on Monday, August 18. A senior Iranian official told Reuters that, due to the diplomatic impasse, the country is shifting to a fully offensive military posture. At the same time, there were no reports of new attacks from either side on August 18.
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The Iraqi Cabinet approved mechanisms for exporting Iraqi oil bypassing the Strait of Hormuz—through specialized international and local companies, as well as several export routes. Contracts under the new mechanism will be valid for three months, starting September 1.
Two major Chinese shipping operators have stopped routing oil tankers through the Strait of Hormuz and the Bab el-Mandeb Strait amid the conflict in the Middle East. According to industry sources, tanker trackers, and a broker interviewed by Reuters, the companies are instead picking up oil cargoes outside the Persian Gulf.
Market sources, citing data from the American Petroleum Institute, reported a decline in U.S. crude oil and distillate inventories over the past week, while gasoline inventories rose. Analysts surveyed by Reuters had expected official statistics from the U.S. Energy Information Administration to show a decline in oil inventories of approximately 600,000 barrels for the week ending August 14.
