OIL prices retreated on Thursday, ending a five-day rally in US crude and a six-day advance in Brent, as investors weighed the prospects of reopening the Strait of Hormuz amid heightened tensions between Washington and Tehran.
US crude fell below US$83 a barrel, while Brent slipped towards US$88, with traders balancing hopes of a diplomatic breakthrough against mounting uncertainty over the conflict and disruption to a key global energy route.
US President Donald Trump said the United States had "total control" over the Strait of Hormuz, as negotiations between Washington and Tehran remained deadlocked.
The Trump administration is also moving to increase economic pressure on Iran after its military campaign failed to force Tehran to capitulate.
The measures include expanding sanctions and enforcing a naval blockade aimed at curbing Iranian oil exports, raising the risk of further disruption to global energy supplies.
The International Energy Agency’s latest monthly report said the global oil market could face a shortfall of 1.8 million barrels per day this quarter as the conflict continues to disrupt energy flows in the Middle East.
But the prospect of tighter supplies was offset by a substantial increase in US crude inventories.
US Energy Information Administration data showed domestic crude stocks rose by 17.4 million barrels last week, their largest weekly increase since early 2023.
Markets were also assessing fresh US inflation data, which eased some concerns over the Federal Reserve’s interest-rate outlook.
Meanwhile, the dollar index slipped to about 99.9 on Wednesday after US consumer prices rose broadly in line with expectations in July.
Core consumer prices, excluding food and energy, rose 0.2% month-on-month and 2.5% year-on-year, with the annual increase matching its slowest pace since March 2021.
Overall consumer prices rose 0.1% from June and 3.4% from a year earlier.
The moderation in inflation, following last week’s weaker-than-expected jobs report, could give the Federal Reserve greater room to balance price stability against risks to employment.
For oil markets, however, the Strait of Hormuz remains the overriding geopolitical risk.
The waterway is a critical global energy chokepoint, and any prolonged disruption could place renewed upward pressure on crude prices despite weaker demand expectations and rising US inventories.
Investors are therefore watching closely for any indication that Washington and Tehran can break their negotiating deadlock and agree on terms for reopening the strait. - August 13, 2026
