Oil prices remained broadly stable on Friday, August 14, as geopolitical risks in the Middle East continued to support crude, while weaker demand expectations and rising U.S. inventories limited further gains.
Brent crude futures edged up 0.08% to around $87.14 a barrel, while West Texas Intermediate (WTI) gained 0.13% to approximately $81.36.
Both benchmarks were on track for their first weekly increase in three weeks, rising roughly 4% over the week. The gains were largely driven by concerns over potential disruptions to oil supplies from the Middle East.
The Strait of Hormuz remains a major focus for traders. The U.S. and Iran have continued to issue conflicting statements over control of the strategic waterway and the movement of commercial vessels.
Iran has claimed control of the strait and said commercial shipping has been disrupted, while the U.S. has maintained that it is facilitating maritime traffic. Reports that some vessels are avoiding the area have added to concerns about possible supply disruptions.
The stakes are significant because around one fifth of global oil consumption normally passes through the Strait of Hormuz. Any prolonged disruption could therefore create a sharp supply shock and push crude prices higher.
Additional risks are emerging around other major shipping routes. Iran-backed Houthi forces in Yemen have also targeted commercial vessels around the Red Sea and Bab al-Mandab Strait, increasing uncertainty for global energy markets.
Weak Demand Caps the Rally
Oil’s gains were limited after OPEC and the IEA lowered their forecasts for global oil demand growth. Concerns over slower economic activity and high energy prices suggest consumption could weaken in the months ahead.
A larger-than-expected rise in U.S. crude inventories also pressured prices, although U.S. emergency oil reserves remain at their lowest level in more than 40 years.
Oil is caught between geopolitical supply risks and weakening demand. Any escalation involving Iran or the Strait of Hormuz could send crude sharply higher, while easing tensions, rising inventories, or weaker demand could quickly reverse the rally.
For traders, this makes Middle East headlines, U.S. inventory data, and OPEC and IEA demand forecasts key signals to watch. The balance between supply disruption risk and slowing demand could determine oil’s next major move.
