Oil prices fell on Thursday as investors balanced weaker global demand expectations against ongoing disruptions to energy supplies in the Middle East.
U.S. West Texas Intermediate futures declined about 2% to $81.61 a barrel, while Brent crude, the international benchmark, was down 1.8% at $87.40.
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Demand Outlook Weakens
The International Energy Agency said global oil demand is now expected to decline more sharply than previously forecast, with the prolonged closure of the Strait of Hormuz weighing increasingly on the market.
At the same time, efforts to restore global supply remain constrained by renewed hostilities and disruptions to maritime transport. Global oil supply was still 6.3 million barrels per day below year-earlier levels in July, according to the IEA.
Middle East Risks Remain
Security concerns continue to affect shipping routes across the region, with attacks reported on vessels in the Gulf of Oman and the Red Sea this week.
Oman is also dealing with an oil spill after a tanker carrying an estimated 800,000 barrels of Russian crude ran aground on June 30. The vessel has reportedly begun leaking oil along the country’s coastline, including near a nature reserve home to Arabian Sea humpback whales and Socotra cormorants. Reuters report on the Oman oil spill.
Diplomatic efforts to reopen the Strait of Hormuz appear to be continuing, but the conflict, now more than five months old, continues to disrupt regional energy flows.
“The lack of clarity over the possibility of a full reopening of the waterway could leave oil prices exposed to the upside at a time when the market remains tight,” said Christopher Tahir, senior market strategist at Exness. He added that further setbacks could push prices higher, leaving the oil market caught between deteriorating demand prospects and persistent supply risks.
