Key Points
- WTI crude declined to $82.31 while Brent fell to $88.07 during Thursday trading
- Commercial crude stockpiles in the US surged by 17.4 million barrels, marking the largest weekly increase since early 2023
- OPEC reduced its 2026 demand growth projection to 580,000 barrels per day
- The IEA reversed its outlook, now forecasting a 1.6 million bpd demand decline for this year versus prior growth expectations of 1 million bpd
- Ship traffic through the Strait of Hormuz fell to three-week lows, maintaining concerns over potential supply constraints
Crude oil markets experienced downward pressure Thursday following an unexpected surge in American petroleum stockpiles combined with pessimistic demand revisions from leading energy organizations. While Middle Eastern supply concerns offered limited support, they proved insufficient to prevent the selloff.
By 0800 GMT, Brent futures had declined 91 cents, representing a 1% decrease to $88.07 per barrel. West Texas Intermediate crude lost 96 cents, sliding 1.2% to $82.31. The decline erased portions of gains accumulated during the prior five to six trading sessions.
American Petroleum Stockpiles Register Biggest Weekly Jump in Two Years
Data from the Energy Information Administration revealed that commercial crude oil stockpiles in the United States increased by 17.4 million barrels during the week ending August 7. This elevated total inventories to 424.4 million barrels, reaching their highest point since early June.
The stockpile expansion significantly exceeded market expectations. Reuters polling of analysts had anticipated a decline of 1.4 million barrels. The substantial increase resulted partially from a collapse in export activity.
According to PVM analyst John Evans, the inventory shock maintained downward pressure, preventing prices from breaching the $90-per-barrel threshold.
Major Energy Agencies Downgrade Consumption Projections
In its monthly report, OPEC lowered its global oil demand growth estimate for 2026 to 580,000 barrels per day. This marked the organization’s fourth downward revision in 2025.
The IEA adopted an even more bearish stance, reversing its previous growth forecast entirely. The agency now projects a 1.6 million bpd consumption decline for the current year, a dramatic shift from its earlier estimate of 1 million bpd growth.
Both institutions attributed the revisions to weakening economic expansion, elevated commodity prices, and constrained fuel availability connected to the continuing US-Israeli conflict with Iran.
The United States has substantially depleted its Strategic Petroleum Reserve throughout the year to mitigate supply disruptions stemming from the conflict. Additional data confirmed significant SPR drawdowns.
Hormuz Tensions Maintain Supply Disruption Concerns
Notwithstanding bearish market fundamentals, the Strait of Hormuz impasse continued generating trader anxiety. Washington and Tehran both asserted authority over the critical waterway this week without achieving diplomatic progress.
BREAKING: President Trump says the US has “total control” over the Strait of Hormuz and “I think we will keep it.” pic.twitter.com/JBKe2D3BBo
— The Kobeissi Letter (@KobeissiLetter) August 12, 2026
A high-ranking Iranian official stated Wednesday that negotiations to resurrect an interim agreement between the US and Iran, originally reached in June, had stalled completely. Maritime traffic through the Strait, excluding container vessels, decreased to just five transits on Wednesday—the lowest level recorded in three weeks, based on shipping intelligence from Kpler.
Prior to the outbreak of hostilities, the Hormuz strait facilitated approximately 20% of worldwide petroleum consumption.
Houthi forces operating from Yemen intensified pressure through continued attacks on commercial vessels navigating the Red Sea and the Bab el-Mandeb Strait.
Meanwhile in Eastern Europe, Russian forces launched strikes against Ukraine’s Izmail port facilities in the Odesa region during overnight operations. Additionally, a drone assault sparked a blaze in Salavat, Russia, the location of a significant oil refining complex.
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