Oil Hits Three-Week High as Hormuz Closure Keeps Supply Risks Elevated

Brent settled at $91.02 and WTI at $84.94 as Iran said the Strait of Hormuz would remain closed and US-Iran diplomacy showed little sign of progress.

HOUSTON, UNITED STATES — Oil prices closed at their highest levels in more than three weeks on Tuesday as the breakdown in US-Iran diplomacy and sharply constrained traffic through the Strait of Hormuz kept a geopolitical premium in global energy markets.

 Brent crude futures settled at $91.02 a barrel, up 15 cents, while US West Texas Intermediate finished at $84.94, up 44 cents, according to Reuters market data. Both benchmarks ended at their highest closes since July 24.

The daily gains were modest, suggesting traders have become less reactive to repeated shifts in wartime rhetoric. The underlying supply problem, however, remains substantial: the world’s most important oil transit chokepoint is carrying only a fraction of the volumes seen before the conflict.

Iran said Tuesday that the Strait of Hormuz would remain closed until the United States met conditions linked to the interim agreement reached in June. President Donald Trump said no talks with Iran were planned and maintained that the strait was open and operating. Shipping data cited by news organizations show traffic remains far below normal.

EIA data show the scale of the disruption

US Energy Information Administration data put total oil flows through Hormuz at an average 21.6 million barrels per day in the fourth quarter of 2025. By the second quarter of 2026, the average had fallen to 4.9 million barrels per day.

That collapse has forced producers and buyers to improvise. Saudi crude can move west through pipelines toward the Red Sea, some cargoes are being transferred outside the Gulf, and ships operating with tracking systems switched off complicate the picture. Those workarounds soften the shortage but cannot fully replace normal Hormuz capacity.

The EIA’s latest global oil-market outlook assumes shipments through the strait will remain severely constrained through August before increasing gradually. It also estimated large production shut-ins across Gulf exporters because crude cannot move normally to market.

Diplomacy and security now move prices together

The market is watching several negotiations at once. US-Iran talks have stalled, while Iran and Oman say they are working on an arrangement for managing traffic through the strait. Washington has objected to elements of the emerging Oman-Iran framework.

At the same time, security incidents continue. A vessel leaving the strait was struck Tuesday by an unknown projectile, according to a British maritime-monitoring report cited by Reuters and AP, while broader conflict in the Gulf and Red Sea has kept tanker risk elevated.

For consumers and businesses, oil benchmarks are only one part of the transmission mechanism. Refining costs, shipping insurance, regional product shortages and currency movements determine how much of a crude-price increase reaches gasoline, diesel, aviation fuel and industrial inputs.

The main market uncertainty is therefore not simply whether Brent moves above or below $90 on a given day. It is how quickly normal shipping can return through Hormuz. Until there is a durable security and diplomatic arrangement, a major share of global oil supply remains exposed to disruptions that can reprice energy with little warning.

By Adriana Collins | Business | CRN Times

Published: 18 August 2026, 2:45 p.m.