Oil futures extended gains on Tuesday as geopolitical tensions in the Strait of Hormuz and unexpected U.S. crude inventory data supported prices.
Brent crude futures expiring in October rose 0.6% to $91.54 a barrel by 16:46 ET, the highest since July 24, while U.S. West Texas Intermediate crude futures expiring in October climbed 0.3% to $84.27 a barrel, the highest since July 31. The gains followed a 17% drop in daily vessel crossings through the Strait of Hormuz to 10 on Tuesday, according to Kpler data, after traffic fell to just three crossings on Sunday.
The U.S. and Iran remain at an impasse over control of the strategic waterway, with Washington asserting full control and Tehran demanding U.S. concessions including the cessation of hostilities and unfreezing of assets. An interim memorandum of understanding between the two nations, signed in June, expired earlier this week after collapsing in July. U.S. President Donald Trump stated that no talks with Iran were ongoing or scheduled, reiterated a naval blockade, and warned of military action against Oman if it interfered with U.S. efforts to reach a deal with Tehran.
Trump also noted that alternative supply routes, including domestic U.S. production from Texas, Alaska, and Louisiana, had helped prevent prices from surging further. Meanwhile, Iran worked on a framework for managing the strait with Oman, while the UAE suspended all trade and financial transactions with Iran after detecting two Iranian ballistic missiles targeting maritime navigation.
U.S. commercial crude oil inventories, excluding the Strategic Petroleum Reserve, rose by 4.4 million barrels in the week ending August 14 to 428.8 million barrels, the highest level since May 29 and well above market expectations of a 200,000-barrel build. This marked the third consecutive week of inventory increases. However, total U.S. inventories, including the SPR, fell by 900,000 barrels to 722.2 million barrels, the lowest since April 1984. Stocks at the Cushing, Oklahoma hub declined by 1.3 million barrels to 21.3 million barrels during the same period.
Analysts attributed the inventory build to weaker refinery demand and seasonal maintenance, while the broader decline in total inventories reflected continued drawdowns from the SPR to stabilize domestic markets.
