Recap: The oil market retraced its recent losses on Thursday as traders remained cautious on the outcome of the Iran-Oman talks and the reports of attacks on Saudi tankers in the Red Sea and Gulf of Aden. The market posted a low of $74.57 in overnight trading on news that Iran and Oman reached an agreement on the geographic coordinates for a shipping route through the Strait of Hormuz. However, the crude market bounced off its low and retraced its losses as the market remained concerned over shipping through the Red Sea, in light of the news of Yemen’s Houthis launching missile strikes on Saudi oil tankers. The market extended its gains to over $2.90 as it rallied to a high of $78.15 by mid-day following the news that an Iranian parliament committee was reviewing a preliminary bill to ban U.S., Israeli and other vessels deemed hostile from the Strait of Hormuz and fine violators of the proposed restrictions up to 20% of cargo value. The oil market later settled in a sideways trading range during the remainder of the session. The September WTI contract settled up $2.07 at $77.29 and the October Brent contract settled up $3.04 at $82.49. The product markets ended the session higher, with the heating oil market settling up 8.58 cents at $3.882 and the RB market settling up 9.97 cents at $2.9385.
Technical Analysis: The crude market on Friday will remain headline driven and will remain well supported by concerns over supply leaving the Middle East region. The market will look to the developments on the Iranian bill that would ban U.S. and Israeli vessels from the Strait of Hormuz. The oil market is seen finding support at $74.57, $74.24, $72.51, $70.68, $68.61, $67.82 and $67.12. Meanwhile, resistance is seen at $78.15, $79.06, $80.56, $82.05, $82.33, $86.87 to $87.68, $92.83 and $93.50.
Fundamental News: Shipping traffic through the Strait of Hormuz and the Bab-el-Mandeb strait, the key maritime chokepoints in the Gulf, reduced significantly on Wednesday from the previous day. Shipping data from Kpler showed two vessels transited the Strait of Hormuz, including a Panama-flagged coal-laden carrier entering the waterway and another commodity Marshall Islands-flagged vessel exiting, down from eight vessels a day earlier. Kpler data showed that in the Bab el-Mandeb, only one commodity vessel, a Bahamas-flagged dry bulk carrier, crossed the strait on Wednesday, down from 20 the previous day. Yemen’s Iran-aligned Houthis said on Wednesday they had launched a missile strike on a Saudi oil tanker off the coast of the kingdom’s Red Sea port city of Yanbu and another missile attack on a Saudi oil tanker in the Gulf of Aden.
Bloomberg reported that the United Arab Emirates has moved more oil through the Strait of Hormuz than any other producer over the past two months. It stated that individual ships spotted on tracking databases give clues about the trade, but the real number is likely larger due to “dark” crossings.
U.S. imports of Middle Eastern crude are set to reach about 600,000 bpd in August, the highest level since the Iran war began, as a brief opening of the Strait of Hormuz and the rerouting of Saudi oil through the Suez Canal pushed barrels toward American ports. Nearly a dozen ships loaded with Middle Eastern crude were headed to U.S. ports as American refiners and traders moved swiftly to purchase barrels that exited the strait when a memorandum of understanding signed by U.S. and Iran in June helped release vessels from the maritime choke point. Also, increasing imports are cargoes from Saudi Arabia’s Red Sea port of Yanbu that are traveling through the Suez Canal to the United States.
Fitch Ratings’ base-case Brent oil price assumption of $87/barrel on average in 2026 incorporates a substantial geopolitical risk premium, including renewed flare-ups, hostilities or even a short-term hot war in the Middle East. However, it continues to see downside risks to its 2026 assumption.
Early Market Call – as of 8:50 AM EDT
WTI – Sep $76.82, down $1.41
RBOB – Sep $2.9546, up 8 points
HO – Sep $3.87, down 6.06 cents
