TLDR
- Brent crude declined to $88.07 per barrel while WTI slipped to $82.31 during Thursday’s trading
- US crude stockpiles jumped 17.4 million barrels, marking the largest weekly increase in over 20 months
- OPEC slashed its 2026 oil demand growth projection to 580,000 barrels daily
- The IEA reversed its outlook, now forecasting a 1.6 million bpd demand decline this year versus prior growth expectations of 1 million bpd
- Ship traffic through the Strait of Hormuz fell to three-week lows, maintaining supply disruption fears
Crude oil markets experienced a downturn Thursday following an unexpectedly large increase in US petroleum stockpiles and revised demand projections from leading energy organizations. While Middle Eastern supply concerns offered limited price support, they proved insufficient to prevent the downward momentum.
Brent crude futures declined 91 cents, representing a 1% decrease, settling at $88.07 per barrel as of 0800 GMT. West Texas Intermediate crude dropped 96 cents, down 1.2%, reaching $82.31. The losses erased much of the gains accumulated during the previous five to six trading sessions.
Record-Breaking Weekly Inventory Surge Shocks Markets
According to the Energy Information Administration, commercial crude oil stockpiles in the United States climbed by 17.4 million barrels during the week ending August 7. This increase pushed total inventories to 424.4 million barrels, representing the highest stockpile level recorded since early June.
The substantial build caught market participants completely off guard. Market analysts surveyed by Reuters had anticipated a drawdown of 1.4 million barrels instead. The unexpected accumulation resulted primarily from a significant decline in crude exports.
PVM analyst John Evans noted that the inventory shock effectively capped prices beneath the psychologically important $90-per-barrel threshold.
Major Energy Agencies Issue Bearish Demand Revisions
In its monthly market assessment, OPEC reduced its global oil demand growth estimate for 2026 to 580,000 barrels daily. This marked the organization’s fourth consecutive downward revision this year.
The International Energy Agency delivered an even more pessimistic outlook, completely reversing its previous stance. The Paris-based agency now anticipates a 1.6 million bpd contraction in consumption for the current year, a dramatic shift from its earlier projection of 1 million bpd growth.
Both institutions attributed their bearish revisions to weakening economic expansion, elevated pricing levels, and constrained fuel availability stemming from the continued US-Israeli conflict with Iran.
Washington has aggressively tapped its Strategic Petroleum Reserve throughout the year to mitigate supply disruptions from the regional hostilities. Independent data confirmed substantial declines in SPR inventory levels.
Persian Gulf Tensions Maintain Supply Uncertainty
Notwithstanding the bearish pressure on crude values, the unresolved Strait of Hormuz standoff kept market participants on edge. Both Washington and Tehran asserted authority over the critical shipping channel this week, with diplomatic efforts stalled.
BREAKING: President Trump says the US has ātotal controlā over the Strait of Hormuz and āI think we will keep it.ā pic.twitter.com/JBKe2D3BBo
ā The Kobeissi Letter (@KobeissiLetter) August 12, 2026
A high-level Iranian official revealed Wednesday that negotiations aimed at restoring an interim US-Iranian agreement, initially reached in June, had reached an impasse. Maritime traffic through the Strait, excluding container vessels, plummeted to just five crossings on Wednesday, marking the lowest volume in three weeks based on shipping intelligence from Kpler.
Prior to the outbreak of hostilities, the Hormuz chokepoint facilitated approximately 20% of worldwide oil consumption.
Houthi militants in Yemen further complicated the regional security environment through continued assaults on commercial shipping in the Red Sea and 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 major oil refining complex.
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